TaxTMI 
TaxTMI 
2025 (3) TMI 1819
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....g grounds of appeal: 1. The impugned order is illegal, opposed to the facts, contrary to law, against the principles of natural justice and without application of mind and therefore liable to be quashed. 2. The learned CIT (Appeals) erred in confirming the addition of Rs. 1,51,82,506/- towards increase in the capital account despite the fact that the assessee submitted reasonable and acceptable explanation for the increase in the capital account. 3. The learned CIT (Appeals) failed to note that the capital account balance for Assessment Year 2014-15 was in respect of both the medical profession and the crusher unit business whereas the capital account balance for Assessment Years 2015-16 and 2016-1 7 did not inclu....
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....retion to the capital when compared to the last year. In the course of the assessment proceedings, the assessing officer noticed that the capital increased from Rs. 1,06,33,904/- in the last year to Rs. 3,17,59,864/- resulting in an increase of Rs. 2,11,25,960/- but the net profit as profit and loss account was Rs. 59,43,454/- only and therefore required the assessee to reconcile the increase in the capital account. The assessee explained that he opted for presumptive taxation under section 44AD in respect of crusher unit business for assessment years 2015-16 and 2016-17 and therefore the capital account relating to the crusher unit business could not be uploaded in the return. It was explained that the assessee maintained regular books of ....
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....pital account balance both before the AO and the ld. CIT(A). The assessee challenged the ld. CIT(A)'s order before the us. 5. The ld.AR for the assessee stated that the assessee has been regularly filing his income tax returns. Since, the assessee is having both income from business as well as profession as a doctor, he had opted to pay tax u/s.44AD in respect of the income from business for the A.Ys.2015-16 and 2016-17. Therefore, the capital account balance held in the business as on 31.03.2014 of Rs. 1,92,02,091/- had not been considered and prepared the capital account of profession as detailed below: Closing capital balance as on 31.03.2014 of profession 66,08,513/- Add: Profit for the year 2014-15 14,76,686/- Other C....
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.... 8,913/- 0/- God's account 12/- 12/- Total 1,19,78,200/- 2,17,69,380/- Less: Drawings 6,83,364/- 13,04,351/- Closing capital balance as on 31.03.2017 1,12,94,836/- 2,04,65,029/- Therefore, the closing capital balance as on 31.03.2017 of the assessee was Rs. 3,17,59,865/- considering the capital of both the profession and business. In support of the above the assessee filed paper book-1 of 12 pages consisting of the following details: - Statement of capital account of the assessee in business as well as profession for the A.Y. 2014-15 to 2017-18 - Capital ledger account of both business & profession for the A.Y. 2014-15 to 2017-18 - Written submission filed before the AO....
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....orities below along with the paper book filed. Admittedly, the assessee has filed his return of income for the impugned assessment year 2017-18 by declaring income from business as well as profession. The Books of accounts are audited u/s.44AB of the Act and assessee has filed its audit report in Form 3CB & 3CD duly certified by CA along with the return of income. We note that the assessee has shown a net profit under the head business (Gomathi Stone Metal works) to the tune of Rs. 46,08,083/- (after adjustment of depreciation income shown in computation was Rs. 74,31,750/-) and Profession (Padma Clinic) of Rs. 13,35,371/- (Paper book - 2 page No. 9 to 11). 11. Further, we have observed that the assessee has filed his return of income fo....
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..../- Less: Drawings 4,67,052/- 0/- Closing capital balance as on 31.03.2015 76,20,263/- 1,70,56,005/- Therefore the closing capital balance of both business and profession as on 31.03.2015 was Rs. 2,46,76,241/- Particulars Profession Business Closing capital balance as on 31.03.2015 76,20,263/- 1,70,56,005/- Add: Profit for the Fin.year 2015-16 13,30,987/- 10,37,996/- Other Credits 9,473/- 0/- Profit transferred from Gomathi Stones 29,70,068/- 0/- God's account 12/- 272/- Total 1,19,30,776/- 1,80,94,273/- Less: Drawings 12,96,873/- 9,32,990/- Closing capital balance as on 31.03.2016 1,06,33,903/- 1,71,61,283/- The closing capital balance o....