If the profit and loss account of the assessee also includes the presumptive income, the common business expenditure has to be apportioned to arrive at the correct amount of profit credited to the profit and loss account and assessable on a presumptive basis. The tax auditor, in such a situation, should arrive at a fair and reasonable estimate of such expenditure on the basis of evidence in possession of the assessee or by asking the assessee to prepare such an estimate, which should be checked by him.
It is also necessary to mention the basis of apportionment of common expenditure. However, if the tax auditor is not satisfied with the reasonableness of such apportionment, he should indicate such fact under this clause by a suitable note.