Commissioner of Income Tax vs Elbee Services P. Ltd.

The assessee is engaged in the business of providing courier services. The assessee made an application u/s 195(2) of the Income Tax Act, 1961, seeking directions from the Assessing Officer to decide as to what portion of remittance made to Universal Parcel Services Worldwide Forwarding Inc., a non-resident company, would constitute income chargeable to tax in India in the hands of the said non-resident company. The Tribunal has come to the conclusion that in the present matter, on facts, no part of the operations were carried out by the non-resident company in India and, accordingly, the Tribunal confirmed the finding of the Commissioner of Income Tax (Appeals). Being aggrieved by the decision of the Tribunal, the present appeal has been preferred by the Department.

This appeal has been filed u/s 260A of the Income Tax Act, 1961. The appeal is misconceived. No substantial question of law is raised in this appeal. It is well settled that the orders passed u/s 195(2) of the Income Tax Act are not conclusive. They do not pre-empt the Department from passing appropriate orders of assessment. We have already taken a view in Income Tax Appeal No. 217 of 2000, Commissioner of Income Tax Vs. Tata Engineering and Locomotive Co. Ltd., , in which this court has laid down that the findings given u/s 195(2) of the Income Tax Act will not preclude the Department from taking a contrary view in the assessment proceedings. Hence, no substantial question of law arises. The appeal is dismissed accordingly.