WIPRO GE HEALTHCARE PRIVATE LIMITED,BANGALORE vs. THE DEPUTY COMMISSIONER OF INCOME TAX,, BANGALORE

ITTPA 776/BANG/2026Status: DisposedITAT Bangalore07 September 2026AY 2022-23129 pages
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What did the Tribunal hold?

The Tribunal held that the TPO's action in determining the ALP of intra-group service charges at NIL and the confirmation thereof by the DRP could not be sustained. The Tribunal noted that the assessee had provided detailed information regarding the nature of services, supporting agreements, invoices, and party-wise breakups, totaling INR 4,12,92,788. These services were considered operational and business support, not merely shareholder activities. The Tribunal emphasized that the TPO cannot step into the shoes of the businessman to decide if services were required or commercially prudent; the TPO's jurisdiction is limited to determining the arm's length price. The Tribunal found that the ALP was determined at NIL without proper benchmarking or identifying comparable uncontrolled transactions, which is contrary to the statutory framework. Furthermore, no specific service was analyzed to demonstrate it was performed solely in the capacity of a shareholder. The Tribunal also noted that an identical issue for AY 2021-22 in the assessee's own case (IT(TP)A No. 870/Bang/2025) was decided in favor of the assessee. Respectfully following that decision and in the absence of distinguishing facts from the Revenue, the Tribunal directed the AO/TPO to delete the adjustment made on account of intra-group service charges. The issue of transfer pricing documentation rejection and other grounds related to margin computation, filters, and comparability analysis were not explicitly decided in this extract, but the appeal was partly allowed.

What were the facts?

The assessee, Wipro GE Healthcare Private Limited, filed an appeal against the assessment order dated January 28, 2026, passed by the Deputy Commissioner of Income Tax (DCIT), Circle – 6(1)(1), Bangalore, under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961. This order was passed pursuant to directions from the Dispute Resolution Panel (DRP). The assessee challenged transfer pricing adjustments and corporate issues. A significant dispute involved the TPO's determination of the arm's length price (ALP) of intra-group service charges at NIL, on the grounds that no benefit was derived by the assessee and the services were shareholder activities. The assessee had claimed various support services from associated enterprises totaling INR 4,12,92,788. The TPO and DRP rejected this claim.

What were the issues?

1. Whether the TPO/DRP erred in rejecting the transfer pricing documentation maintained by the assessee under Section 92D of the Act read with Rule 10D of the Income-tax Rules, 1962, on the basis that the assessee did not apply appropriate filters, rendering the data unreliable (mixed question of law and fact, concerning Section 92D and Rule 10D). 2. Whether the TPO/DRP erred in determining the arm's length price (ALP) of intra-group service charges at NIL, on the grounds that no benefit was derived by the assessee and the services were in the nature of shareholder activities (mixed question of law and fact, concerning Section 92C and Rule 10B). Assessee's Contentions: - The TPO/DRP erred in rejecting the TP documentation and the value of international transactions recorded in the books of accounts as ALP. - Provisions like 'provision of doubtful debts and advances' and 'rates and taxes' were wrongly treated as non-operating. - 'Miscellaneous income' and 'deferred income' were wrongly treated as non-operating. - The TPO/DRP did not follow a consistent approach in categorizing expenses as operating/non-operating. - Filters applied by the TPO/DRP were erroneous, including the rejection of the 'Net Fixed Assets to sales ratio > 200%' filter and incorrect application of 'Persistent Operating Losses' and 'Related party' filters. - The TPO/DRP wrongly excluded certain companies from the comparables list and wrongly included others for Software and Engineering Design Services, Distribution Segment, and Contract Manufacturing. - The TPO/DRP erred in not applying an upper turnover filter and relying on information obtained under Section 133(6) without providing an opportunity for cross-examination. - Regarding intra-group services, the assessee provided detailed documentation and the services were operational and business support, not merely shareholder activities. The TPO cannot substitute their commercial prudence for the assessee's. The ALP was determined at NIL without proper benchmarking or identifying comparable uncontrolled transactions. Revenue's Contentions: - The judgment does not explicitly record the revenue's contentions on all grounds, but it is implied that the revenue supported the TPO's and DRP's findings regarding the rejection of TP documentation, the nature of services, and the determination of ALP at NIL.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144C(5),Section 92D,Section 92C,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.

PER SHRI WASEEM AHMED, ACCOUNTANT MEMBER:

This appeal has been instituted by the assessee against the assessment order passed by th

The order continues below.

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