SUDALAI MANI GURUMOORTHI,THIRUVARUR vs. ACIT, CIRCLE-1, , THANJAVUR

The assessee is an individual and is a partner in two firms. The assessee filed the return of income for AY 2014-15 on 21.04.2015 declaring a total income of Rs.21,85,370/- and agricultural income of Rs.2,89,110/-. The AO noticed that the assessee has purchased a property during the year under Sudalai Mani Gurumoorthi :- 2 -:

1. consideration for Rs.82,00,800 and that the guideline value of the property fixed by JSRO is Rs.1,82,33,200/-. The AO accordingly reopened the assessment by issue of notice u/s.148 of the Act. The AO called on the assessee to explain as to why the difference cannot be added as income u/s.56(2)(vii)(b) of the Act. The assessee submitted that the market value of the property is less than the guideline and that the Highway Department of the Government has acquired the adjacent land for a similar price. The assessee also submitted that the guideline value is subsequently reduced by 1/3rd and therefore no addition u/s.56(2)(vii)(b) is warranted. The assessee without prejudice submitted that a reference to the valuation officer may be made. The AO did not accept the submissions of the assessee regarding the market value. The AO however made a reference to the valuation officer on 11.12.2018 and since the valuation of report was not received the AO passed the order u/s.147 due to time limits for completing the assessee wherein the AO made an addition of Rs.1,00,32,400/- u/s.56(2)(vii)(b) of the Act. The AO had stated in the assessment order that the addition would be revised after receipt of valuation report. Aggrieved, the assessee filed further appeal before the CIT(A). The assessee did not appear before the CIT(A) and the CIT(A) passed an ex-parte order upholding the order of the AO.