Illustration 2: M.R.P. Singh, who maintains his books by Single Entry System, has submitted returns to the Income Tax Authorities showing his income to be as follows: Rs. r34 31" Dec. 1989 , 1990 1991 - 1992 . 1993 ,, 1994 3,675 3,700 3,935 6,875 6,070 4,630 But the Income Tax Authority is not satisfied as to the accuracy of accounts submitted. You are asked help in finding accuracy. In this regard you are given with the following information: i) Business assets and liabilities as on December 31, 1998 were: Debtors, Rs. 725; Cash at Bank, Rs. 4,735, Stock, Rs. 2,710 (at market price which is 25% above cost); Creditors, Rs. 3,660. ii) M.R.P. Singh owed his sister, Rs. 2,000 on 31st December, 1988. On 15th March, 1991 he repaid this amount and on 14 April, 1994, he lent his sister Rs. 1,500. iii) M.R.P. Singh owns a house which he bought in 1984 for Rs. 10,000 and a car which he bought in 1990 for Rs. 3,750. In 1993, he bought Rs. 5,000 shares in X Ltd. for Rs. 3,750. iv) In 1994, Rs. 1,500 were stolen from his house, v] M.R.P. Singh stated that his living expenses have been: Rs. 1,500; Rs. 2,000; Rs. 3,000; Rs. 3,500; Rs. 3,500; Rs. 3,500 during the years 1989, 1990, 1991, 1992, 1993 and 1994 respectively. These expenses are exclusive of the amount stolen vi) On 31" December, 1994, the business liabilities and assets were: Creditors Rs. 4,200; Debtors, Rs. 2,960; cash in hand, Rs. 9,725 and stock Rs. 3,370 (at market price which shows as gross profit of 25%). From the information submitted, prepare a statement showing whether or not the income declared by M.R.P. Singh is accurate