SM Services, a partnership firm consists of 2 working partners, Sunil and Murthy with 60% and 40% share, respectively. As per the partnership deed, they are eligible for interest on capital @ 15% p.a. on their capital co

Computation of Total Income of SM Services for the assessment year 2023-24 Particulars Amount (₹) Amount (₹) Net profit as per profit and loss account before interest on capital and remuneration to partners and other items 25,36,000 Less: Expenditure allowable from business income Interest @ 12% p.a. [being the maximum allowable as per section 40(b)] (₹18,00,000 x 2 x 12%) 4,32,000 Current year revenue expenditure on scientific research under section 35(1)(i) 2,20,000 Current year depreciation under section 32(1) 3,72,000 Current year capital expenditure on scientific research under section 35(1)(iv) 4,25,000 Unabsorbed depreciation of A.Y. 2011-12 under section 32(2) 58,000 Unabsorbed capital expenditure on scientific research relating to P.Y. 2019-20 under section 35(4) 75,000 (15,82,000) Book Profit (A) 9,54,000 Less: Partners' remuneration allowable under section 40(b) (i) As per limit prescribed in section 40(b) On first ₹3,00,000 @ 90% 2,70,000 On the balance ₹6,54,000 @ 60% 3,92,400 Total 6,62,400 (ii) Remuneration actually paid or payable [₹55,000 x 12 + ₹45,000 x 12] 12,00,000 (i) or (ii) whichever is less, is deductible (B) 6,62,400 Profit from manufacturing business (A-B) 2,91,600 Less: Brought forward business loss of A.Y. 2014-15 [Not allowed to set off since 8 years have been already expired] - Less: Brought forward business loss of A.Y 2018-19 (32,000) Profits and gains of business or profession 2,59,600