Schneider Electric Private Limited Vs DCIT (ITAT Delhi)
Schneider Electric Pvt. Ltd. challenged transfer pricing adjustments of ₹83.69 crore made across three segments—Business Support Services, Contract R&D, and Intra-Group Services—along with a notional interest addition on AE receivables.
The ITAT found that the TPO had used wrong margins, ignored DRP directions, selected high-profit, functionally dissimilar comparables (Infosys, Wipro, Cybage, Tata Elxsi, etc.), and arbitrarily set ALP of intra-group services at Nil without examining evidence.
For Business Support Services, the Tribunal corrected margins and directed recomputation.
For Intra-Group Services, it restored the issue for fresh verification of actual services received.
For Contract R&D, it removed 5 high-risk software giants and ordered fresh benchmarking.
For interest on receivables, it held that working capital adjustment must be considered first (Kusum Healthcare) and remanded the issue.
Thus, major relief was granted and the case was partly allowed with directions to recompute ALP properly.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the Assessee against the final assessment order dated 28.10.2024 passed by the Assessment Unit, Income-tax Department (hereinafter referred to as the Ld. AO) u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2021-22.
