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2018 (2) TMI 1996 - AT - Income TaxReopening of assessment u/s 147 - different view with regard to the taxability of the management services fees received - HELD THAT:- We have noticed that the assessing officer has mentioned in the reasons for reopening that certain agreements have not been considered or not considered properly. But the Ld A.R has demonstrated that the agreement dated 01st April, 1998 (referred to in AY 2005-06) relates to the agreement under which the assessee has availed services from VOIPL and paid money to it. Hence the agreement dated 01st April, 1998 is not relevant for the issue under consideration, i.e., receipt of management service fee from VOIPL. In AY 2007-08, the assessing officer has stated that the agreement was not been explored by the AO in the original assessment proceedings, which is nothing but taking a different view on the same matter. AO has attempted to give a reasoning to support his reasons for re-opening, we are of the view that the same would not be legally supporting the view of the AO. Hence, we are of the view that there is merit in the contentions of the assessee that the assessing officer has reopened the assessments of both the years only on account of change of opinion. There is also merit in the contentions of the assessee that the assessing officer has changed his opinion on the basis of view taken by him while completing the assessment of the assessment year 2009-10. Accordingly we set aside the order passed by Ld CIT(A) on this issue and hold that the reopening of assessments of both the years are not in accordance with the law and accordingly quash the assessment orders passed for both the years under consideration. Since the assessing officer has not issued notices u/s 143(2) of the Act after filing of returns in both the assessment years, the assessment orders are liable to be quashed on this ground also. Management service fees received by the assessee as “Royalty” in AY 2009-10 - AO has reopened the assessments of both the years under consideration after passing of order for AY 2009-10 and accordingly assessed the management service fee received in both the years under consideration as Royalty. The assessment order passed for AY 2009-10 has been challenged by the assessee and when it reached ITAT, the Tribunal, [2016 (11) TMI 1249 - ITAT MUMBAI] has held that the management service fees cannot be assessed as Royalty in terms of Article 12(4) of India Netherlands Treaty. Accordingly, on merits of the issue also, the addition made by the AO by assessing the management service fee as Royalty is liable to be deleted. Both the appeals of the assessee are allowed
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