ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), VADODARA vs. M/S SCHAEFFLER INDIA LTD, VADODARA

ITA 2036/AHD/2025Status: DisposedITAT Ahmedabad13 February 2026AY 2009-10Bench: DR. BRR Kumar (Vice President), Shri T. R. Senthil Kumar (Judicial Member)8 pages
AI SummaryDismissed

What did the Tribunal hold?

The Income Tax Appellate Tribunal (ITAT) dismissed all appeals filed by the Revenue, confirming the CIT(A)'s decision to delete the upward adjustment to royalty payments. The Tribunal held that TNMM was the most appropriate method for determining the Arm's Length Price (ALP) of royalty payments to AEs, consistent with its own previous judgments for earlier assessment years and the TPO's admission in the remand report for the current years.

What were the facts?

The assessee, M/s. Schaeffler India Ltd., engaged in manufacturing bearings, faced an upward adjustment by the TPO for royalty payments made to Associated Enterprises (AEs) for AYs 2006-07 to 2009-10, using the Comparable Uncontrolled Price (CUP) method. The DRP largely upheld this addition. The ITAT had previously remanded the matter to CIT(A) with specific directions to apply the Transactional Net Margin Method (TNMM) for benchmarking royalty payments, which the CIT(A) followed, deleting the adjustment.

What were the issues?

Whether the Arm's Length Price (ALP) for international transactions involving royalty payments to Associated Enterprises should be determined using the Comparable Uncontrolled Price (CUP) method or the Transactional Net Margin Method (TNMM), and whether the CIT(A) erred in deleting the TPO's adjustment based on TNMM.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C,Section 92CA(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH

Before: DR. BRR Kumar & Shri T. R. Senthil Kumar

PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

These four appeals are filed by the Revenue as against separate appellate orders dated 19-08-2025 and 14-08-2025 passed by the Commissioner of Income Tax (Appeals)-13, Ahmedabad arising out of the assessment orders passed under section 143(3) r.w.s. 144C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2006-07 to 2009-10. Since common issues are involved in all these appeals, for the sake of convenience the same are disposed of by this common order.

I.T.A Nos. 2017, 2018, 2019 & 2036/Ahd/2025 A.Ys. 2006-07 to 2009-10 2 ACIT vs. M

The order continues below.

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