ROCKWELL AUTOMATION INDIA PRIVATE LIMITED,DELHI V. DCIT CIRCLE-19(1), DELHI

ITA 3861/DEL/2024

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Rockwell Automation India Private Limited appealed against the final assessment order passed under sections 143(3) read with 144C(13) and 144B of the Income Tax Act, 1961, for the Assessment Year 2020-21. The primary contention revolved around the transfer pricing adjustments made by the TPO, which included adjustments for the distribution segment and business support services segment, as well as interest on outstanding receivables from AEs. The Tribunal examined the selection of comparable companies, the application of filters such as the related party transactions filter, and the functional comparability of the companies included in the comparables set. The Tribunal's decision involved a detailed analysis of the functions performed, assets employed, and risks assumed by the companies in question.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787417 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2020-2021
• Appeal Filed On: 23-08-2024
• Other Referred Cases: EIT Services India Pvt. Ltd. [TS-60-ITAT-2023(Bang)-TP], ITA No.6806/Del/2018, ITA No.1638/Del/2022, ITA No.232/Del/2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Assessee Lawyers: AJIT JAIN
• Keywords: Additional evidence; Transfer pricing; International transaction; Rule of consistency; Notional interest; Initiation of penalty proceedings; Related party transaction
• Section: 143(3); 234B; 92C; 92D

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3861/Del/2024 (ASSESSMENT YEAR 2020-21) Rockwell Automation India Private Limited, Registered address: 131, Functional Industrial Are, Patparganj, Delhi-110092 Communication address: 131, Functional Industrial Area, Patparganj, New Delhi. PAN-AACCR3791A Vs. Deputy Commissioner of Income Tax, Circle-19(1), Delhi. (Appellant) (Respondent) Assessee by Shri Ajit Jain, AR Department by Shri Dharm Veer Singh, CIT-DR Date of Hearing 19.08.2025 Date of Pronouncement 17.11.2025 O R D E R PER MANISH AGARWAL, AM: This appeal is filed by the assessee against the final assessment order passed u/s 143(3) r.w.s 144C (13) read with section 144B of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) dated 30.07.2024 for Assessment Year 2020-21. 2. Brief facts of the case ae that the assessee is a company engaged in the business of manufacturing / assembling of automation and industrial control products / systems. The case was selected for scrutiny and a reference was made to the TPO due with transactions with AE’s. The return of income was filed on Printed from counselvise.com 2 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 15.02.2021 declaring total income at Rs.97,08,46,360/-. The TPO vide its order dated 28.07.2023 passed u/s 92CA(3) of the Act has proposed adjustments totaling to Rs. 26,12,44,668/-. Thereafter, the AO has passed the draft assessment order u/s 144C(1) of the Act dated 27.09.2023 wherein the AO has proposed the additions towards the TP adjustment as per TPO’s order and proposed to assess the total income of the assessee at Rs.19,88,57,458/- and further proposed to disallow relief claimed u/s 90/90A at Rs.1,04,60,287/-. Against the draft assessment order, the assessee filed objections before the DRP. 2.1 Ld. DRP in terms of its order dated 28.06.2024 decided the objections raised by the assessee and directed the AO/TPO to incorporate them. Thereafter, the TPO passed the order giving effect to the directions of the Hon’ble DRP vide order dated 25.07.2024 wherein the total adjustments were computed at Rs.10,54,56,848/- on the following:- (i) Distribution Segment - 8,43,18,133 (ii) Business Support Services Segment – 1,69,10,011 (iii) Interest on outstanding receivables – 42,28,704 2.2 The AO have than passed the final assessment order on 30.07.2024 u/s 143(3) r.w.s. 144C(13) r.w.s. 1444B of the Act wherein after incorporating the adjustment referred by the TPO and further disallowing the relief claimed u/s 90A of the Act, total income stood computed at Rs.1,11,49,80,881/-. 3. Against the said order, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “Pertaining to Transfer Pricing matters 1. On the facts and in law, the Honourable Dispute Resolution Panel ('Hon'ble DRP'), the Learned Transfer Pricing Officer (Ld. TPO) and the Ld. AO (hereinafter collectively to be referred as \"Revenue\") erred in making an adjustment of INR 10,54,56,848 to the total Printed from counselvise.com 3 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT income of the Appellant on account of the difference in the arm's length price (ALP) of its international transactions under the provisions of Section 92CA(4) of the Act. 2. On the facts and in law, the Hon'ble DRP has grossly erred in restoring certain transfer pricing matters to the Ld. TPO and Ld. AO, which is in gross violation of section 144C(8) of the Act and thus, the final assessment order passed dated 30 July 2024 is bad in law and deserves to be quashed. 3. On facts and in law, the Ld. AO/TPO erred by not following the directions of Hon'ble DRP and violating the provisions of Section 144C(10) read with Section 144C(13) of the Act, thereby rendering the assessment proceedings bad and invalid in law Adjustment of INR 8,43,18,133 relating to the distribution segment 4. On facts and in law, the Revenue erred in selecting companies (Siemens Ltd, Schneider Electric India Pvt. Ltd., Emerson Electric Co. India Pvt. and Honeywell Automation India Ltd. Ltd.) with existence of related party transactions which is in violation of section 92C of the Act read with rule 10B(2) of the Rules. 5. On facts and in law, the Revenue erred selecting certain companies which fails the Revenue's own filters: a. erred in including a company (Gujarat Poly Electronics Ltd.) in the comparable set which fails the Revenue's own negative net worth filter. b. erred in including certain companies (Schneider Electric India Pvt., Yokogawa India Ltd., R S Components & Controls (India) Ltd., Emerson Electric Co. India Pvt. Ltd., Honeywell Automation India) Ltd.) which are failing the Revenue's own filter of trading probe to sales of 75% 6. On facts and in law, the Revenue erred in rejecting the economic analysis carried out by the Appellant in the Transfer Pricing (TP) documentation, modifying the same with his own analysis and is doing 6.1 erred in not appreciating that none of the conditions set out in section 920(Ty of de Act are satisfied in the present case. 6.2 contravened section 92C of the Act read with Rule 108(2) of the Income Tax Rules, 1962 ('the Rules) by selecting companies that are not comparable to the Appellant in terms of functions performed aca assets employed and risks assumed 6.3 contravened section 920 of the Act read with Rule 10842) of the Rules, by rejecting the comparable companies selected by the Appellant in the economic analysis undertaken in the TP documentation which was prepared and maintained in compliance with section 92D of the Act read with Rule 100 of the Rules. Printed from counselvise.com 4 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 7. On facts and in law, the Revenue erred in incorrectly computing the net profit margin of Siemens Ltd. 8. On the facts and in law, the Revenue erred in disregarding the fact that subject international transaction was accepted by the Ld. TPO in all preceding assessment years and the facts and circumstances, including even Functions, Assets and Risk ('FAR') profile of the Appellant, are identical in the assessment year under consideration and the preceding assessment years, thereby disregarding the rule of consistency as enunciated in various judicial pronouncements. 9. On the facts and in law, the Revenue erred in not appreciating the fact that Appellant is already earning a significantly higher margin in the distribution segment and the adjustment as proposed by the Revenue would result in supernormal profits, which is unjust and contrary to the arm's length principle. Adjustment of INR 1,69,10,011 relating to the business support services segment 10. On facts and in law, the Revenue erred in rejecting the economic analysis carried out by the Appellant in the TP documentation, modifying the same with his own analysis and in doing so. 10.1 erred in not appreciating that none of the conditions set out in section 92C(3) of the Act are satisfied in the present case. 10.2 contravened section 92C of the Act read with Rule 10B(2) of the Rules by selecting companies that are not comparable to the Appellant in terms of functions performed, assets employed and risks assumed. 10.3 contravened section 920 of the Act read with Rule 10B(2) of the Rules, by rejecting the comparable companies selected by the Appellant in the economic analysis undertaken in the TP documentation which was prepared and maintained in compliance with section 92D of the Act read with Rule 10D of the Rules. 11. On facts and in law, the Revenue erred in not allowing a risk adjustment under Rule 10B(1)(c) of the Rules for determination of the ALP to account for differences in the risk profile of the Appellant, a limited risk service provider vis-à-vis the comparable companies, that are full-fledged risk bearing entrepreneurs. Adjustment of INR 42,28,704 relating to treatment of outstanding receivables from AE as \"unsecured loans\" imputing interest thereon 12. On facts and in law, the Revenue erred in making an adjustment of INR 42,28,704 by treating delayed outstanding receivables from the AEs as unsecured loans and imputing interest thereon Printed from counselvise.com 5 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 13. On facts and in law, the Revenue erred in disregarding the fact that outstanding receivables from the AEs is not a separate transaction but a consequence of international transactions 14. On facts and in law, the Revenue erred in by determining the arm's length price of the impugned international transaction without applying any method prescribed as per Section 920 of the Act. 15. On facts and in law, the Revenue erred in not appreciating that the Appellant did not charge any interest from third-party customers either on outstanding receivables, which represents an arm's length scenario. In doing so, the Revenue erred in not taking cognizance of the order of the Tribunal in Appellant's own case for AY 2014-15 and AY 2017-18. 16. On facts and in law, the Revenue erred in not appreciating that the working capital adjustment subsumes the impact of any additional return on account receivables. 17. On facts and in law, the Revenue erred in arbitrarily applying a markup of 400 basis points on 6 months LIBOR for the purpose of computing notional interest on outstanding receivables. Pertaining to corporate tax matters Erroneous addition of INR 2,92,79,876 in relation to the income computation and disclosure standards (ICDS) which has already been disallowed in Income Tax Return ('ITR'). 18. On the facts and in the circumstances of case and in law, the learned AO has erred factually considering the total income of appellant as the income processed by CPC vide intimation u/s 143(1) of the Act in the impugned order which resulted into disallowance on account of ICDS adjustment. 19. On the facts and in the circumstances of case and in law, the learned AO erred in making adjustment of 2,92,79,876 with respect to increase in profit on account of adjustment of ICDS I and ICDS VI as disclosed in clause 13(e) of the Tax Audit Report ('TAR'). 20. On the facts and in the circumstances of case and in law, the learned AO has erred in not appreciating the fact that each adjustment of ICDS as disclosed in tax audit report has been given effect (Disallowed the adjustments which resulted in increase in profit and claimed allowance of the adjustment which resulted in decrease in profit) in the ITR Form 6 by the Appellant. Non-grant of credit for taxes paid vide Form 69 Printed from counselvise.com 6 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 21. On the facts and circumstances of the case and in law, the learned AO has erred in not granting credit of the tax paid amounting to INR 31,04,400 towards suo-moto withdrawal of claim of health and education cess. While computing the demand payable. Erroneous levy of interest under section 2341, 234B and 234C of the Act. 22. On the facts and in the circumstances of case and in law, the learned AO has erred in levying additional interest under section 234A, 234B and 234C of the Act on account of the additional tax liability which arose due to above erroneous additional made in the assessment order. 23. The Appellant submits that the aforesaid additional interest levied by the learned AO is consequential in nature and would be automatically deleted once the disallowances mentioned above are deleted. Initiating Penalty under section 274 r.w.s. 270 of the Act. 24. On the facts and in the circumstance of the case and in law, the learned AO has factually and legally erred in initiating penalty proceedings for under reporting of income under section 274 the Act. 25. On the facts and in the circumstances of the case and in law, the learned AO has factually and legally erred in not appreciating the fact that the addition made in the assessment order does not represent any under reporting of income. In view of the same, the penalty provisions under section 274 r.wa. 270 of the Act ought not to have been triggered 26. In view of the above, the Appellant prays, that the learned AO be directed to drop the penalty proceeding initiated on account of alleged misreporting of income as the same is erroneous, unwarranted, bad in law and liable to the deleted.” 4. During the course of hearing in terms of letter dated 21.03.2025, assessee has raised additional grounds of appeal on the limitation issues. Thereafter, the assessee in terms of the letter filed on 1st July, 2025 has withdrawn the additional grounds of appeal taken and, therefore, we have not deliberate the additional grounds of appeal taken and then withdrawn by the assessee. With the above background, we proceed to decide the appeal of the assessee. 5. Grounds of appeal No.1 to 3 are general in nature and require no adjudication. Moreover, no separate submissions is made on these grounds of appeal. Printed from counselvise.com 7 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 6. Ground of appeal No.4 to 9 are with respect to the adjustments made of Rs.8,43,18,133/- by the AO under Distribution Segment. 7. In Ground of appeal No. 4, the assessee has challenged the action of the AO/TPO in selecting four comparable companies which have failed the related party transactions filter (RPT filter). Before us, the Ld. AR of the assessee submits that the assessee has taken total 12 comparables as per its TP study report, however, the AO/TPO has added the certain new comparables out of which four comparables’ companies namely (i) Siemens Ltd. (ii) Schneider Electric India Pvt. Ltd. (iii) Emerson Electric Co. India Pvt. Ltd. (iv) and Honeywell Automation India Ltd. had failed the RPT filer. Ld. AR submits that ld. DRP has directed to the TPO to re- examined whether these four companies have passed all filters applied by the AO/TPO, however, the Ld. TPO in the order giving effect has included these companies by wrongly observing that these four companies have found to be functionally similar and passed all the filters applied by the TPO. The Ld. AR drew our attention to the fact that the TPO has applied one of the filter i.e. RPT filter of 25% whereas all these four companies having significant related parties transactions thus, they all have fails in RPT filter of 25% and accordingly, the same should be excluded. 8. On the other hand, the Ld. DRP supports the order of the lower authorities and submits that to examine the contention of the assessee, the matter be sent back to the file of the Ld. AO. 9. Heard both the parties and perused the material available on record. With respect to the four companies i.e. M/s Siemens Ltd., M/s Schneider Electric India Pvt. Ltd., M/s Emerson Electric Co. India Pvt. Ltd. and M/s Honeywell Automation Printed from counselvise.com 8 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT India Ltd., the main argument of the assessee is that these four companies have failed in RPT of 25% applied by TPO since they are having significant related party transactions. In view of these facts, we direct the AO/TPO to verify this fact and exclude these companies if they have failed in RPT filter of 25%. With this direction, the ground of appeal No. 4 of the assessee is partly allowed for statistical purposes. 10. In Ground of appeal No.5 (a), the assessee has challenged the inclusion of the company M/s Gujrat Poly Electronics Ltd. since it has failed the negative net worth filter. Before us, the Ld. AR submits that Hon’ble DRP has directed the AO/TPO to verify whether this company had passed all filter applied by the TPO. The Ld. AR submits that the company M/s Gujrat Poly Electronics Ltd. have failed the negative net worth and for this he drew our attention to page no.1134 which is the copy of annual report available in the paper book compilation filed by the assessee, according to which the company is having negative net worth. The Ld. AR further submits that company is functionally dissimilar also. He thus submits that this company is not at all comparable and deserves to be excluded. 11. On the other hand, the Ld. CIT-DR supports the order of the AO/TPO and requested for the inclusion of this company. 12. Heard the parties. From the perusal of the order of TPO, it is seen that before the TPO, the assessee objected that the company M/s Gujrat Poly Electronics Ltd. has negative net worth which is evident from the page 280 of the appeal set wherein the net worth for financial 2018, 2019 and 2020 is reproduced based on the annual report of company. According to the same, in all the three years the company has negative net worth however, the AO/TPO in final order failed to appreciate this fact and included this company in the final set of comparables for sworking out of the Printed from counselvise.com 9 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT TP adjustments. In view of these facts, we hereby direct the AO/TPO to exclude the company M/s Gujrat Poly Electronics Ltd. since it has failed the net worth filter. With these directions, ground of appeal No.5(a) of the assessee is allowed. 13. Remaining ground of appeal No.5(b), 6, 7, 8 & 9 are general in nature as stated by the AR of the assessee during the course of hearing, thus are not adjudicated. 14. With respect to the ground of appeal No.7, the assessee has alternatively contended that the AO/TPO has computed net profit margin of Siemens Ltd. incorrectly. Since, we have already directed to AO/TPO to exclude this company if its fails RPT filters while deciding the assessee’s ground of appeal No. 4 thus, this ground of appeal needs no separate adjudication. 15. In the result, the ground of appeal No. 4 to 9 with respect to the transfer pricing adjustment under Distribution Segment are partly allowed for statistical purposes. 16. The ground of appeal No.10 and 11 are with respect to the adjustment of Rs.1,69,10,011/- made under the Business Support Segment. 17. Before us, the Ld. AR of the assessee stated that ground of appeal No.10.1 is general in nature and has not pressed ground of appeal No.11 thus they are dismissed 18. Only grounds of appeal remained are Groundds of appeal No. 10.2 and 10.3 wherein the assessee has challenged the inclusion of the companies which are not functionally comparable and exclusion the comparables on the basis of functionally similar. Before us, the Ld. AR of the assessee submits that under business support segment, the assessee provides various support services which includes Co- coordinating sale strategy and certain other activities such as: Printed from counselvise.com 10 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT  Acting as primary conduit for sales feedback on products and programs;  Working with global Rockwell marketing teams to help identify and prioritize target customers, market segments, and growth opportunities through knowledge of customers needs, market trends, other international and external environment trends;  Analyzing product and program sales results, and report on programs andsales performance;  Marketing for Business development, including planning/executing customers meetings/visits, and actively assisting with sales and marketing programs;  Developing internal/external messaging strategies etc. including creation of presentations/tools to support communication/commercial messages;  Presentation and articulating Rockwell’s product and solution portfolio, along with value proposition to Global Account Customers, commercial message;  Overall coordination and business development of key accounts, 18.1 The assessee has taken eight companies in the TP study report, out of which TPO has rejected seven comparables and included 10 additional companies. In the final order, total seven companies were taken out of which three are from the TP study report and four were included by TPO. Before us, the Ld. AR submits that four companies included are (1) Pressman Advertising Ltd. (ii) Russell Reynolds Associates India Private Limited (iii) Majestic Research Services & Solutions Ltd. (iv) M N S Credit Mgmt. Group Pvt. Ltd. 18.2 The Ld. AR submits that all these four companies are functionally dissimilar as the assessee is engaged in the business of development and project support service, market research services and solutions whereas these companies have their Printed from counselvise.com 11 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT major revenue is from the business which are functionally dissimilar. M/s Pressmen Advertising Ltd. is engaged in the business of advertising, public relations and allied services of selling advertising space in print media. M/s Russell Reynold Associates India Pvt. Ltd. is engaged in placement services. M/s Majestic Research & Solutions Ltd. is engaged in market research service. M/s MNS Credit Mngt Group is providing debt management, business information report and legal services. Ld. AR thus requested to exclude these companies from the final set of comparables. 19. On the other hand, the Ld. CIT-DR submits that all the four companies are functionally similarly and engaged in the business of providing advisory services which are similar to the asessee’s business support services, and, therefore, they are rightly included the AO/TPO. 20. The Ld. CIT DR also placed reliance on the judgment of the Hon’ble Jurisdictional High Court wherein the Hon’ble High Court has held that if the companies are broadly similar to the assessee funcitons, the same should be considered for the bench marking. 21. Heard both the parties and perused the materials available on record. With respect to M/s Pressman Advertising Ltd., assessee’s claim is that the company is functionally dissimilar as it is engaged in the business of selling advertisement spaces in print media, whereas the assessee is providing business support services to its AEs and, therefore, it is not functionally similar. In this regard, reliance is placed on the judgment of the Co-ordinate Bench, Bengalore Tribunal in the case of EIT Services India Pvt. Ltd. [TS-60-ITAT-2023(Bang)-TP], wherein the Co-ordinate Bench has held that M/s Pressman Advertising Ltd. is engaged in the business of Printed from counselvise.com 12 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT providing advertising, public relations and allied services in the nature of selling advertising space in print media. In contrast the assessee provides business support services. 21.1. Upon careful consideration of the fact, we find that this company was included by the TPO and from the perusal of its financial for 31st March, 2020, we find it’s major revenue was from “charges received on such services’ whereas the assessee is in the business of support for marketing strategy sales improvement of sale by providing the recent market trends customers needs, market trends, other internal and external environment trends. Thus, functionally M/s Pressman Advertising Ltd. is not comparable with the functions performed by the assessee under the business support segment and therefore, we direct the AO/TPO to exclude this company from the final set of comparables. 22. M/s Russel Reynolds Associates India Private Limited- Apparently, it is seen that from the annual report of this company, that this company is engaged in the business of Placement Services and mainly is a placement agency and it is major revenue is from legal and consultancy services from the placement services, therefore, it cannot be included as a correct comparable of the assessee since it is not in the business of providing business support services, therefore, we direct the AO/TPO to exclude this company from the final set of comparables. 23. M/s Magestic Research Services & Solutions Ltd.- The claim of the assessee is that this company engaged in providing qualitative and quantitative market research services and is not functionally similar. The reliance is also placed on the judgment of the Bangalore Tribunal in the case of EIT Services India Pvt. Ltd. (supra). After considering the facts stated by the assessee before the ld. DRP placed Printed from counselvise.com 13 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT in the appeal set, we find that this company is engaged in the business of hosting fairs, events etc. and also providing market research services and thus having its functions are similar to the functions performed by assessee in this segment and therefore, the AO/TPO has rightly included the same and we do not interfere in the order of AO/TPO with respect to this company. 24. Last company is M/s M N S Credit Mgmt. Group Pvt. Ltd.- The assessee’s claim is that this company is functionally dissimilar as it is engaged in the business of performing support services and collection services whereas the assessee engaged in the providing business support services and not collection services. We find that this company is performing debt management business and collection services, therefore, the same is functionally dissimilar and thus should be excluded. Therefore, we direct the AO/TPO to exclude this company from the final set of comparables. With the above directions, the ground of appeal No.10.2 of the assessee is partly allowed. 25. In Ground of appeal No.10.3, the assessee is requested for inclusion of the four companies which are being excluded by the TPO/AO. The claim of the assessee is that the four companies (i) M/s Deepali Design & Exhibits Pvt. Ltd. (ii) DNA Entertainment Networks Pvt. Ltd. (iii) MIG Media Neurons Ltd. and (iv) Fusion Events Ltd. are service provider and providing even management and operation services. The assessee claimed that these companies are providing event management services to its customers which is similar to the services provided by the assessee to its AE which are also in the nature of business event management and operation services and thus they are very much similar to the functions carried by the assessee. Printed from counselvise.com 14 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 26. On the other hand, the Ld. CIT-DR submits that these company are engaged in the event management and, therefore, they are not good comparables. He requested accordingly. 27. After considering the facts and the nature of the activities carried out by all these four comparables companies which are engaged in the business of organizing exhibition and event and are broadly functionally similar to the sales and marketing services rendered by the assessee to its AEs to provide better market information’s and customers. Therefore, their activities are functionally similarly to the activities of the assessee. In view of the these facts, we are of the view that these four companies are good comparables and directed the AO/TPO to include these companies in the final set of comparables for working the adjustments under business support segment. With these directions, ground of appeal No.10 & 11 of assessee are partly allowed. 28. Grounds of appeal No.12 to 17 are with respect to the interest on to outstanding receivables adjustments of Rs.42,28,704/-. The Ld. AR of the assessee submits that the TPO has considered the delay in payment from AEs and proposed libor plus 400 basis point for charging the interest. The Ld. AR submits that this issue is squarely covered by the judgment of the Hon’ble Co-ordinate Bench in assessee’s own case for Assessment Year 2014-15 in [ITA No.6806/Del/2018] and Assessment Year 2017-18 in [ITA No.1638/Del/2022] and requested for deletion of the same. 29. On the other hand, the Ld. CIT-DR submits that assessee’s is not a debt free company and is paying interest on the funds borrowed thus , there is no reason for not charging interest on the outstandings from AE’s . Printed from counselvise.com 15 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 30. We have heard the rival submissions and perused the material available on record. It is seen that this issue has been decided by the Co-ordinate Bench of the Tribunal in Assessment Year 2014-15 and 2017-18 in assessee’s own case, however, after considering these two judgments, the Co-ordinate Bench in Assessment Year 2016-17 in ITA No.232/Del/2022 vide order dated 10.05.2024 has held that the interest should be charged on outstanding receivables from the AE’s after netting off the amount of receivables qua relevant AEs. The Co-ordinate Bench has confirmed the chargeability of interest at libor plus 400 basis point which comes to 6.2006%. The relevant observations of Co-ordinate Bench as contended in para 19 to 21 are as under: “19. We have heard the rival submissions and perused the materials available on record. The ld. TPO found from the financials of the assessee company that assesse had substantial amount of outstanding receivables from AEs which have remained outstanding for a prolonged period and no interest has been charged for the same. This was picked up by the Id TPO as a separate international transaction requiring benchmarking. The fact that whether this could be treated as a separate International transaction within the meaning of section 928 of the Act is not in dispute before us. The Id TPO observed that the assessee had not provided Invoice-wise details in the proforma given to it and proceeded to Impute interest @4.485% (LIBOR plus 400 basis points) on the outstanding receivables for 182 days and proposed an adjustment of Rs. 13,66,836/. Before the Id DRP, the assessee submitted that there are lot of amounts that are payable by the assessee to its AEs on which also no interest is being paid by the assessee. Hence, It was pleaded before the Id DRP that the amounts payable should be netted off with amount receivables from AEs and on the net amount, Interest is to be imputed. This was accepted by the Id. DRP and direction was given to Id TPO accordingly to recompute interest chargeable on outstanding net receivables. The Id TPO accordingly arrived at Rs. 4,62,940/- as interest on outstanding receivables and proposed adjustment thereon. 20. It is fact that the delay in receivables from AE was estimated by the Id TPO to be at 182 days. It is a fact that invoice wise details were not furnished by the assessee either before the Id. TPO or before Id. DRP or even before us. The Id AR stated before us that credit period allowed to the assessee was 30 days and he had admitted that there is delay in receipt of outstanding receivable from AEs. He also submitted that there are huge amounts payable to the AE on which the interest is not paid by the assessee and that amounts payable to AE are much Printed from counselvise.com 16 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT more than amounts receivable from AEs and accordingly, he argued that no interest is required to be imputed in the instant case. He also drew our attention to the order passed by this tribunal in assessee's own case for AY 2015-16 and 2017-18 where this issue is decided in favour of the assessee. Per contra, the id DR also placed an order for AY 2013-14 in the assessee's own case wherein, this issue was restored to the file of the Id TPO. 21. To resolve this dispute we find that assessee is supposed to provide the Invoice wise details in respect of outstanding receivables from AEs before the Id TPO. If any monies are payable to AEs and if any amount are due from such AEs, then the assessee is justified in seeking netting off the balance and then arrive at the chargeability of interest at LIBOR plus 400 basis points i.e. 4.485% (which is not in dispute before us). In our considered opinion, the assessee will not be justified to seek netting off of amounts payable to AEs with outstanding amounts receivable from AEs on consolidated basis or on entity level basis. It has to be done qua the relevant AEs. With these directions, we deem it fit to restore this entire issue to the file of the Id AO/ TPO for de novo adjudication in accordance with law. Needless to mention that reasonable opportunity be given to the assessee of being heard with liberty given to the assessee to file additional evidences, if any, in support of its contentions. Accordingly, ground Nos. 3 to 3.3 raised by the assessee are allowed for statistical purposes.” 31. The facts of the case in impugned year before us are identical to the facts as existed in Assessment Year 2016-17 where the Co-ordinate Bench after considering the judgment for Assessment Year 2014-15 and 2017-18 was of the view that interest should be charged on the outstanding receivables from the AEs subject to netting of outstandings qua the AEs. According, by respectfully following the observations made by the Co-ordinate Bench in Assessment Year 2016-17, we hereby direct the AO to recalculate the amount of interest on the net outstanding as stated above. With these directions, the ground of appeal No.12 to 17 are partly allowed for statistical purposes. 32. Grounds of appeal No.18 to 20 are with respect to the addition of Rs.2,92,79,876/- made on account of ICDS advisory. Printed from counselvise.com 17 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 33. We have heard both the parties and perused the material available on record. The assessee’s claim is that it has already made the adjustment of Rs.2,92,79,876/- in the computation of income and offered the same for tax and if this amount of adjustment is added as has been made in the intimation order passed u/s 143(1) of the Act it would be double taxation. After considering the arguments, we direct the AO to verify the contention of the assessee and if the same is found correct no further addition is required to make in the hands of the assessee. With this direction, this ground of appeal is partly allowed for statistical purposes. 34. Ground of appeal No.21 of the assessee is with respect to not allowing the credit of Rs.31,04,400/- towards the suo moto withdrawal of the claim of health and education cess. 35. Heard both the parties and perused the materials available on record. Before us, the assessee filed the copy of the Form-69 dated 24th Feb. 2023 and the copy of the challan filed by the assessee in the Paper Book. Since, these documents were not verified by the Assessing Officer, therefore, we direct the AP to verify the claim of the assessee and allow the credit in accordance with the law. Accordingly, this ground of appeal is allowed for statistical purposes. 36. Ground of appeal No.22 to 23 of assessee are with respect to levy of interest u/s 234A, 234B and 234C of the Act. We direct the AO to charge the interest u/s 234A and 234B of the Act on the income which is finally computed after giving effect to this order. The interest u/s 234C would be charged on the income declared by the assessee in the return of income filed. With these directions, these grounds of appeal are partly allowed for statistical purposes. Printed from counselvise.com 18 ITA No.3861/Del/2024 Rockwell Automation India Private Limited vs. DCIT 37. Ground of appeal No.24 and 25 are with respect to initiation of penalty proceedings u/s 274 r.w.s 270 of the Act which are premature and, thus, are dismissed. 38. In the final result, the appeal of the assessee is partly allowed as stated above. Order pronounced in the open Court on 17.11.2025. Sd/ Sd/- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 17.11.2025 PK/Sr. PsP Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "