Appeal dismissed for A.Y. 2007-08, ruling favors assessee on section 50C application. Revenue's appeal rejected.

The appeal for A.Y. 2007-08 was dismissed as withdrawn. However, for A.Y. 2008-09 and 2009-10, the court ruled in favor of the assessee regarding the application of section 50C and the adoption of the cost of acquisition. The Revenue's appeal was dismissed, confirming that the indexed cost of acquisition should be computed with reference to the year the previous owner held the asset.

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Issues Involved:
1. Jurisdiction and validity of proceedings initiated under section 147 of the IT Act.
2. Application of section 50C of the IT Act.
3. Adoption of the cost of acquisition and indexation for computing long-term capital gains.

Detailed Analysis:

1. Jurisdiction and Validity of Proceedings Initiated Under Section 147 of the IT Act:
- The assessee contended that the proceedings initiated by the assessing officer under section 147 were without jurisdiction, void, and not based on evidence.
- It was argued that the assessing officer reopened the assessment in the absence of "new material" and failed to issue reasons for believing that the income had escaped assessment.
- The assessee also claimed that the assessing officer did not dispose of objections raised by the assessee through a speaking order.
- However, the grounds of appeal related to these issues were not pressed by the assessee and were dismissed as not pressed.

2. Application of Section 50C of the IT Act:
- The primary issue was against invoking the provisions of section 50C and the consequent addition made in the hands of the assessee.
- The assessee argued that the sales consideration received was less than the guidance value adopted by the AO under section 50C.
- The assessee contended that the difference between the sale value shown and the value adopted by the AO was minimal (2.6% for A.Y. 2008-09 and 0.89% for A.Y. 2009-10) and should not attract section 50C provisions.
- The Tribunal noted that the assessee had entered into a joint development agreement in 2002, and the sale consideration should be based on the rates prevailing at that time, not the revised rates in 2004.
- The Tribunal relied on precedents that if the difference between the declared value and the 50C guidance value is less than 10%, the actual sale consideration should be adopted.
- The Tribunal found no merit in the AO's exercise of applying the 50C guidance value and ruled in favor of the assessee, allowing the grounds of appeal related to section 50C.

3. Adoption of the Cost of Acquisition and Indexation for Computing Long-Term Capital Gains:
- The issue was whether the cost of acquisition and indexation should be based on the year the property was acquired by the previous owner (assessee's parents) or the year it was inherited by the assessee.
- The CIT(A) upheld that the cost of acquisition should be based on the year the previous owner acquired the property, and indexation should be allowed from that year.
- The Tribunal confirmed this view, relying on the decision of the Special Bench in Dy. CIT vs. Manjula J. Shah and the Bombay High Court's ruling in CIT vs. Manjula J. Shah.
- The Tribunal found no merit in the Revenue's appeal and dismissed it, confirming that the indexed cost of acquisition should be computed with reference to the year the previous owner held the asset.

Conclusion:
- The appeal for A.Y. 2007-08 was dismissed as withdrawn.
- The appeals for A.Y. 2008-09 and 2009-10 were allowed, ruling in favor of the assessee regarding the application of section 50C and the adoption of the cost of acquisition.
- The Revenue's appeal was dismissed, confirming the adoption of the cost of acquisition and indexation from the year the previous owner held the asset.

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