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2018 (5) TMI 344 - AT - Income TaxPE - taxability of income earned in India - transactions entered in to by the German Bank with the Indian borrowers - whether the functions performed by the DZ India Bank were of preparatory /auxiliary nature or it was working as an agent of the German Entity? - Held that:- We nowhere find any reference to the contracts entered in to by the German bank with its borrowers and the terms and conditions of such transactions. The assessee claims that Indian Bank was performing certain function that were auxiliary or preparatory. The claim has not been tested with reference to the loan transactions for the year under consideration. Tax has to be determined on the basis of peculiar facts of a year. General observations/general submissions about the theory is not sufficient to levy taxes or claim a particular deduction. Thus, in our opinion both of them have not done their job satisfactorily. The matter needs further verification of facts. It becomes more important, when we find that assessments of earlier three years have been re-opened. So, we hold that in the interest of justice matter should be restored back to the file of the AO for fresh adjudication. Direct the AO to go through the various transactions entered in to by the German Bank with the Indian borrowers and find out as to whether the functions performed by the DZ India Bank were of preparatory /auxiliary nature or it was working as an agent of the German Entity. The correspondence between the borrowers, the lender and the Indian Bank as well as the documents related with money lending transactions should to examined to arrive at a definite conclusion
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