Section 195(2) determination is not conclusive in assessment, so no substantial question of law arose under Section 260A.

An order under Section 195(2) determining the portion of remittance chargeable to tax is not conclusive for assessment purposes and does not preclude the Department from examining the issue afresh in regular assessment proceedings. Because that determination is non-binding in that sense, an appeal under Section 260A challenging the same issue does not give rise to a substantial question of law. The appeal was therefore dismissed as not maintainable on merits.

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Issues: Whether an appeal under Section 260A of the Income-tax Act, 1961 was maintainable when the order under Section 195(2) of the Income-tax Act, 1961 only determined the portion of remittance chargeable to tax and such determination did not preclude the Department from taking a contrary view in assessment proceedings.

Analysis: The direction under Section 195(2) was held to be non-conclusive and not binding in a manner that would foreclose the assessment process. The Court applied the settled principle that findings recorded under Section 195(2) do not prevent the Department from examining the issue afresh while completing assessment. On that basis, the appeal was held to raise no substantial question of law within the scope of Section 260A.

Conclusion: The appeal was not maintainable on merits and was dismissed.

Ratio Decidendi: A determination under Section 195(2) of the Income-tax Act, 1961 is not conclusive for assessment purposes and does not bar the Department from taking a different view in regular assessment proceedings; therefore, no substantial question of law arises in an appeal under Section 260A on that issue.

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