AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 1996
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....and are being disposed of by this common order, for the sake of convenience. 2. The assessee has challenged the reopening of the assessment, validity of assessment order passed and also the correctness of assessment of management service fees as 'royalty'. 3. The assessee is incorporated in Netherlands and is an international dredging contractor. The original assessment for A.Y. 2005-06 was completed u/s. 143(3) of the Act on 31.3.2008 and the original assessment for A.Y. 200708 was completed u/s. 143(3) of the Act on 4.1.2011. The assessee is having an associated concern by name M/s. Van Oord India Private Limited (VOIPL) in India (This Indian company was earlier known as "Ballast Hum Dredging India Private Ltd). The assessee has rec....
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....ade in both the years. Aggrieved, the assessee has filed these appeals before us. 5. The Learned AR challenged the validity of reopening of assessment in both the years on various grounds. The Ld A.R submitted that the Ld CIT(A) has upheld the reopening by observing that Explanation-1 to sec. 147 shall apply to the facts of the present case. The Explanation-1 to sec. 147 states that mere production of account books and other evidence from which material evidence could with due diligence have been discovered by the AO does not necessarily amount to a disclosure within the meaning of first proviso to sec. 147. The Learned AR submitted that the Assessing Officer had raised a specific query during the course of original assessment proceeding....
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....ssessment proceedings. Accordingly he contended that the reopening of assessment is liable to quashed in both the years, as the AO has reopened the assessments merely on account of change of opinion. In this regard learned AR placed reliance on the decision rendered by Hon'ble Supreme Court in the case of CIT Vs. Kelvinator of India (320 ITR 561). 6. The Learned AR also submitted that the assessment orders of both the years are required to be quashed as the Assessing Officer did not issue mandatory notice u/s 143(2) of the Act after filing return of income. Instead he has issued notice u/s. 143(2) in both the years along with notice issued u/s. 148 of the Act, which cannot be considered as proper issue of mandatory notice. 7. The ....
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....erbook). Agreement dated 1 April 2001 - There is no such agreement entered into by the Appellant (refer Page 5 of the assessment order). Agreement dated 1 April 2004 - This agreement was submitted also to the AO during assessment proceedings vide letter dated 15 December 2008 (refer Page 12 of the Paperbook) Hence, the reopening is based on factually incorrect premise viz. that it is factually incorrect for the AO to say that the agreements dated 1st April 1998 and 1st April 2004 were not submitted the reasons recorded by the AO. It is submitted that factually incorrect reasons cannot be the basis of reopening under section 147 of the Act. In this regard, the Appellant relies on the decision of High Court fHC3) of....
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.... 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 200708, 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. Though the assessing officer 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 me....