Hindustan Zinc Ltd. appealed to the Rajasthan High Court (Jodhpur) under Section 260A of the Income-tax Act, 1961, challenging an Income Tax Appellate Tribunal order that sustained a disallowance of deduction claimed under Section 35AB for technical know-how acquired from M/s Davy McKee (Stockton) Limited (DML), a UK company, in connection with the Chanderiya lead-zinc smelter project. The core dispute was whether the appellant was obligated to deduct tax at source under Section 195, given that the actual foreign currency payments to DML were made by Crown Agents in the UK from a UK Government grant, and not directly by the appellant. The appellant argued that since no payment flowed from it to DML outside India, Section 195 and the consequent disallowance under Section 40(a)(i) were not attracted, while the Revenue contended that the Crown Agents merely acted as a disbursement mechanism for the appellant's contractual liability. The High Court noted that the obligation under Section 195 arises only where the payment contains income chargeable to tax in India, as clarified by the Supreme Court in GE India Technology Centre (P) Ltd. v. CIT, but observed that this principle could not assist the appellant unless the consideration to DML was first found not to be chargeable in India. The judgment as provided concludes mid-analysis without recording a final operative order.