ILLUSTRATION 9. Mehvish and Kashish are partners in a firm who share profits and in the ratio of 3:2. The Profit and Loss Account of the firm for the year ended 31st March is as follows: N6 645598 6,00.000 By Sales 32,00.000 By Closing stock 10,00.000 By Rent from H.P. 5,00,000 By Winning from Horse races To Opening stock To Purchases To Office salaries To General Expenses To Donation to National sports fund 2,00,000 To Interest on Capital @ 16% pa. : Mehvish 40,000 Kashish 32.000 72.000 To Salary: Mehvish 1,44,000 Kashish 1.20,000 2.64,000 To Income Tax 4,00,000 To Net Profit 7.52.000 69.88,000 69,88,63 Additional Informations : (a) Closing stock undervalued by 20% (b) General Expenses include: (1) Demurrage charges paid to railways + 10,000 (1) LIC. premium Mehvish 320,000 Kashish 317,000 (e) The firm is to be assessed u/s 184. The salary, interest on capital to partners have bean pil as per deed. Calculate: (1) Total income and tax liability of firm (1) Business income of each partner