The following Trading and Profit and Loss Account of a trader for the previous year is given below: Trading and Profit and Loss Account ParticularsRs.ParticularsRs.To Opening stock180,000By…

The following Trading and Profit and Loss Account of a trader for the previous year is given below: Trading and Profit and Loss Account ParticularsRs.ParticularsRs.To Opening stock180,000By Sales3,000,000To Purchases1,200,000By closing stock200,000To Carriage on purchase20,000To Custom duty5,000To Gross profit c/d1,795,0003,200,0003,200,000To Salaries200,000By Gross profit b/d1,795,000To Office expenses30,000By Gain on sale of business assets20,000To Telephone and electricity18,000By Gift received16,000To Legal charges5,000By Compensation received51,000To Bad debts written off6,000By Dividend from Domestic company14,250To Repairs and maintenance5,000By Bad debts recovered (20% not allowed previously)10,000To Interest on bank loan10,000By Miscellaneous income25,000To Business promotion expenses18,000By Natural resources received (net)127,500To House rent12,000By Gain on sale of non chargeable Business assets20,000To Income tax paid13,000By Discount received1,1500To Donation5,000To Reserve fund15,000To Depreciation on machinery25,000To Research and Development cost50,000To Commission on sale3,000To Provision for bad debts8,000To Bonus to staffs10,000To Net profit c/d1,657,2502,090,2502,090,250 Additional Information: Opening stock was overvalued by Rs 30,000 Closing stock was undervalued by Rs 20,000 Purchase included Rs 200,000 for the purchase of machinery on Ashwin of previous year. 25% of office expenses include expenses of his personal purpose. 40% of bank loan was used for personal purpose. Miscellaneous income included Rs 10,000 income of elder citizen allowances. Income tax paid included Rs 5,000 paid for current year as advance tax. Previous year cumulative business loss stood Rs 75,000. Legal charge includes: i. Defending business assets 3,000. ii. Income Tax appeal Rs 1,000. iii. Income Tax penalty Rs 1,000. Required: a. Net assessable income from Business. b. Net assessable income from investment. c. Statement of total taxable income. d. Tax liability. e. Giving explanation wherever necessary. [10+2+3+2+3]