IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member ITA Nos: 2017, 2018, 2019 & 2036/Ahd/2025 Asst. Years: 2006-07 to 2009-10 The ACIT M/s. Schaeffler India Ltd.

Circle-1(1)(1), P.O. Maneja, Maneja Vadodara Vs Vadodara-390013 Gujarat PAN: AAACF3357Q (Appellant) (Respondent)

Revenue Represented: Shri Kamlesh Makwana, CIT-DR Assessee Represented: Shri Milin Mehta & Shri Bhavin Marfatia, A.Rs.

Date of hearing : 09-02-2026 Date of pronouncement : 13-02-2026 आदेश/ORDER 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.

2. ITA No. 2017/Ahd/2025 for A.Y. 2006-07 is taken as the lead case. Brief facts of the case are that the assessee is a company engaged in the business of manufacturing of various types of Ball and Roller Bearings. For Asst. Year 2007-08, assessee filed its Return of Income declaring total income of Rs.59,30,95,740/-. The return was taken for scrutiny assessment and referred to Transfer Pricing Officer to determine the Arms’ Length Price u/s. 92CA(1) of the Act. Ld TPO made addition of Rs.350.56 lakh on account of upward adjustment of payment of Royalty to Associated Enterprises ("AEs") applying CUP as the most appropriate method in the order passed u/s. 92CA of the Act. The DRP, Ahmedabad vide order dated 27-9-2010 held that the royalty is to be benchmarked using CUP method and royalty at the rate of 2.3% is the correct ALP. Therefore, as against addition of Rs.350.56 lakh on account of royalty payment made by the AO/TPO, the DRP upheld addition to the extent of Rs. 339.24 lakh.

2.1. Aggrieved against the order, the Assessee had filed appeal before ITAT, Ahmedabad vide common order dated 30-04-2019 in ITA No.3400/Ahd/2010, co-ordinate Bench of this Tribunal set aside the issue involving determination of ALP of international transaction of payment of Royalty to AEs to the file of CIT(A) and directed the CIT(A) to adopt the method of TNMM to determine and re-compute the ALP in respect of royalty. Accordingly, this ground was restored back to the file of CIT(A) for re-computation of ALP and Ld CIT[A] passed the following order after calling for a Remand Report from the TPO by observing as follows:

“…. 6.0. I have considered the appellant's submission, the TPO's remand report and the directions given by the ITAT in its order dated 30-4-2019. The issue of payment of royalty in this appeal has been remanded back to the file of this office by ITAT with specific directions. In the remand proceedings, the directions issued by the higher authority are to be strictly followed and the scope of such proceedings is limited to the extent of remand given by the higher authority.

6.1 In the present case, the ITAT has clearly directed that the ALP of the international transaction of payment of royalty should be determined following TNMM method. The contention of the TPO that in many decisions referred in the remand report it has been held that the ALP of royalty payment should be determined by using CUP method is not acceptable at this stage. The TPO has not pointed out any defect in the ALP determined by the appellant using TNMM considering royalty payment for such computation.

6.2 It is also a fact that similar directions were issued by the ITAT in ITA No. 793 & 817/Ahd/2006 dated 14-11-2014 in the appellant's own case for AY 2002-03 wherein the issue of payment of royalty was set aside to the file of CIT(A) for fresh adjudication as per the directions of the ITAT.