Substantial question of law threshold controls admission where tax issues are legal, factual questions and remand points are excluded.

Questions on the taxability of interest income, deduction of interest payable by an Indian branch to its head office and overseas branches, and the application of section 40(a)(i) read with article 7 of the DTAA were treated as substantial questions of law and admitted because they were already being considered in other pending appeals. Questions challenging a remand order, raising a factual matter, or otherwise not showing an adverse legal issue were rejected as not meeting the threshold for admission. The appeal was therefore confined to the admitted legal questions, while the remaining questions were declined.

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Issues: (i) Whether questions 1 to 3 proposed by the Revenue raised substantial questions of law warranting admission of the appeal. (ii) Whether questions 4 to 6 raised substantial questions of law warranting admission of the appeal.

Issue (i): Whether questions 1 to 3 proposed by the Revenue raised substantial questions of law warranting admission of the appeal.

Analysis: The appeal pertained to assessment year 2001-02. Questions 1 to 3 involved the taxability of interest received by the assessee, deductibility of interest payable by the Indian branch to its head office and overseas branches, and the application of section 40(a)(i) in the context of article 7 of the relevant DTAA. The Court noted that these questions were already entertained in other pending appeals and proceeded on that basis to treat them as substantial questions of law.

Conclusion: Questions 1 to 3 were admitted.

Issue (ii): Whether questions 4 to 6 raised substantial questions of law warranting admission of the appeal.

Analysis: Question 4 was rejected because the Tribunal's direction to send the matter back for decision on merits was not adverse to the Revenue and did not justify admission. Question 5 was treated as a factual matter without a substantial question of law, especially in view of the Revenue's own position before the Tribunal and the common disposal of similar appeals. Question 6 was also rejected for the same reasons as question 4. The Court therefore declined to entertain these questions as substantial questions of law.

Conclusion: Questions 4 to 6 were not admitted.

Final Conclusion: The appeal was admitted only on questions 1 to 3 and declined on questions 4 to 6, leaving the merits to be considered in the admitted appeal.

Ratio Decidendi: Only questions that genuinely involve substantial questions of law are admissible in appeal; matters that are factual, non-adverse, or merely remitted for fresh decision do not ordinarily satisfy that threshold.

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