The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT), confirmed 25% deduction in District Level Committee (DLC) rate on account of passing of the Indian Oil Corporation Limited (IOCL) pipeline in the middle part of the land.
The appeal, Ajay Kumar Jain, was filed by the assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2013-14, which in turn arise from the order of the ITO Ward 5(2), Jaipur dated 13.01.2016 passed under Section 143(3) of the Income Tax Act, 1961.
During assessment proceedings, the Assessing Officer noted that the assessee had sold a property for a sale consideration at Rs. 1,25,00,000/-. The DLC rate of that property was at Rs. 1,69,13,704/-. A show cause notice requesting him to show cause as to why the difference of Rs. 44,13,704/- be not added as per provision of section 50C of the Income Tax Act.
The being so that in the impugned land sold by the assessee which though agricultural land but from the middle of the said land IOCL gas pipeline passing to the property and therefore, the assessee justify the reference to the District Valuation Officer (DVO). The DVO adopted the same rate as the assessee has submitted in his valuation report but has not granted the benefit of 25% lessor market value based on the reason.
The CIT(A) and thereby has reduced the rate to the extent of 45% whereas in this case, the assessee has before, entering into a sale agreement obtained valuation report and therefore, claimed by the assessee to the extent of 25% of the DLC rate is justified.
The assessee is at disadvantage on account of passing of gas pipeline restrictions put by provision of section 9 of the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 (P&MP Act) which the DVO has commented upon and the assessee in his affidavit submitted that due to disadvantage, he was unable to find suitable buyer at the DLC rate and therefore, as he was in need has sold property at Rs. 1,25,00,000/- He has obtained the valuation report before entering the transaction and sold the land at rate which in agreement with the valuation report obtained by the assessee.
This conduct of the assessee itself shows that the assessee has acted with due care and concern for which the revenue cannot take undue benefit of the contentions placed on record by the assessee. The valuer while considering the relief at 25% in the DLC rate noted that the assessee’s land is suffering on account of the restrictions put forth by P & M P Act and even by the State Government.
A Two-Member Bench of the Tribunal comprising Dr S Seethalakshmi, Judicial Member and Rathod Kamlesh Jayantbhai, Accountant Member observed that “The assessee was prevented and put with disadvantage and therefore, in that case the relief was allowed in rate to the extent of 25% stands justified, considering the restrictions placed in the middle part of the land and accordingly 25% deduction in DLC rate claimed by the assessee is found fair market and reasonable and does not require any adjustment to the return of income filed by the assessee.”
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