The committee factors in how teams are playing of late.
If Michigan beats Purdue and Indiana, and Indiana loses to Michigan but beats Ohio St...
Michigan would be 26-5 (12-6) Indiana would be 26-5 (13-5).
At that point, Indiana is a 1 seed Michigan is a 2 seed.
Then if they play each other on a neutral court in the Big 10 Championship and Michigan wins again, I think they flop positions. At that point they will have equal amounts of wins and losses to Big 10 teams, Michigan will have a better overall record, and will be 2-1 vs Indiana.
This is all very hypothetical, but if that is how things play out, then yes I believe Michigan is a 1 over Indiana.