Rejection of Account

Rejection of claim of profit and loss expenses on account of its being disproportionate to the quantum of sales and gross profit

Validity

Allegation of disproportionate profit and loss expenses to the quantum of sales and gross profit was not an appropriate reason for the rejection of trading results

Sales and the gross profit were the entries of Trading Account where the profit and loss expenses find entry in the Profit and Loss Account

Entries in the Profit and Loss Account could not be a yardstick for the entries in the Trading Account

Profit and loss expenses were not a standard for measuring trading results

Objection for rejection of the trading results was declared to be improper

When the Assessing Officer found the profit and loss expenses to be excessive, disproportionate, unvouched or unreasonable he could disallow the same under S.23 of the Income Tax Ordinance, 1979, but after proper reasoning and after pointing out specific items which warranted disallowance.

Rejection of Account Rejection of accounts-Additions-Additions of cash credits in suspense account towards income from undisclosed sources-Further additions to profits in business-Whether permissible.