SIRONA DENTAL SYSTEMS PRIVATE LIMITED ,MUMBAI vs. ACIT, CIRCLE 14(1)(2), MUMBAI
Income Tax Appellate Tribunal, MUMBAI BENCH “H” MUMBAI
Before: SHRI AMIT SHUKLA () & SHRI OMKARESHWAR CHIDARA ()
PER OMKARESHWAR CHIDARA, AM This appeal by the assessee is directed against order dated 15.06.2024 passed by the Ld. Commissioner of Income-tax Mumbai (Appeals), [in short ‘the Ld. CIT(A)’] for assessment year 2020-21. 2. The above cited following Grounds of “Based on the facts Dental Systems Priv craves leave to prefe passed by the le (hereinafter referred under section 143(3 144(8) of the Income pursuance of the di Panel-1, (hereinafter grounds, each of wh On the facts and in directions of the Hon Income-tax (Transfe Officer (TPO), has: Grounds of appeal General 1. erred in not a declared by the App making transfer pric Final assessment or 2. erred in not p limit prescribed unde for passing the fin proceedings is time b Validity of the final a 3. erred in not p with the directions of order as bad in law
erred in not g enhancement in the pursuance of the Sirona Denta d appellant company filed an a Appeal for the A.Y. 2020-21 : s and circumstances of the case and in l ate Limited (hereinafter referred to as the fer an appeal against the order dated 19 earned Assessment Unt, Income-tax D d to as Mamed Assessing Officer or le 3) read with section 144C(13) read w e-tax Act 1961 (hereinafter referred to as irections issued by the Hon'ble Dispute r referred to as the Hon'ble DRP') on th hich are without prejudice to one another n the circumstances of the case and in l n'ble DRP/ the learned AD/ Deputy Comm r Pricing)4(1)(1), Mumbai [learned Trans accepting the returned income of INR 2,8 pellant in the Income-tax return of AY 20 cing adjustment of INR 45,78,792. rder barred by limitation: passing the final assessment order with er section 153 of the Act which is the oute al assessment order and hence, the a barred and liable to be quashed; assessment order passed: passing the final assessment order in of the Hon'ble DRP, thereby, rendering the and invalid. granting opportunity of being heard bef e order passed under section 92CA of directions issued by the Hon'ble DRP al Systems Private Limited 2 appeal with the law, Sirona e Appellant) 9 July 2024 Department earned AD) with section the 'Act') in Resolution he following law, on the missioner of sfer Pricing 85,48,550/- 020-21 and hin the time er time limit assessment accordance e impugned fore making f the Act in P, thereby, rendering the impug facts, law and circum Profit level indicator 5. erred in mak purchase of goods fr 5.1 failure to con computing the PLI of 5.2 erroneously co 4,65,54,272 instead 5.3 not considering on sale of assets a classified as non-ope 5.4 not considerin INR 31,81,643 credi without appreciating 3,58,485 was consid 6. erred in rej inappropriate compa 7. Without preju written back is cons prays that the "prov and "provision for amount to INR 4,92, be considered as non 8. erred in initi mechanically and w initiation. The above grounds craves to leave to above grounds of app 3. The appellant c 16/02/2012 is eng equipment in India. T support services in th Sirona Denta gned order as bad in law and arbitrary, mstances of the case and liable to be qua ("PLI") computation: king TP adjustment of Rs. 45,78,792, in rom AE by: nsider the audited financials of the Ap f the Appellant: onsidering the value of operating assista d of INR 4,75,39,584; g prior period expenditure, penalty intere as non-operating expenses though the erating in the original transfer pricing ord ng "warranty provision written back" am ited to profit & loss account as operatin g that "provision written back" amount dered to be operating in nature. ejecting Systopic Laboratories Pvt L arable without providing any reason for re udice to the ground no. 5, where warrant sidered to be non-operating in nature, th vision for doubtful debts" amount to INR doubtful balances with government ,230, debited to profit & loss account, ou n-operating in nature. iating penalty proceedings u/s 270A without recording any adequate satisfacti are without prejudice to each other. The add, withdraw, alter, modify, amend o ppeal before or at the time of hearing.” company, Sirona Dental, was i gaged in trading and distribu The company is also engaged in he form of Armal Maintenance C al Systems Private Limited 3 contrary to ashed. n respect of ppellant for ance at INR est and loss same were der; and mounting to ng in nature ting to INR td as an ejection. ty provision he appellant R 23,43,491 authorities" ught to also of the Act ion for such e Appellant or vary the incorporated on ution of dental limited product Contracts.
In the assessm Rs. 45,78,792/- wh towards “ALP adjus assistance received”, Originally, the TPO h the reasons mention same at Rs. 45,78,79 amount of Rs. 45,78, 5. Aggrieved by th appeal to ITAT with t of this order. 6. As far as the appellant has filed proceedings before IT this legal ground bas pvt. ltd. of Madras prolong the appeal pr to limitation is dismis 7. Coming to the m appellant company h created in earlier ye provisions written b “operative” in natur Sirona Denta ent order, the Ld. AO made an hile giving effect to the Ld. D tment for purchase of goods at the time of completing scrut has made an adjustment of Rs. ned TP order, but the Ld. DRP 92/- and considering the direct ,792/- was added. his order of Ld. A.O, the app the grounds of appeal mentione limitation issue is concerned, d a letter dated 16/10/202 TAT, stating that the appellant sed on the decision of Roca Bath High Court dated 09/06/202 rocess. In view of the same this ssed, as “withdrawn”. merits of the case are considere has argued that since the war ears was treated as “operative” back during this year also sh re. It was submitted that if al Systems Private Limited 4 n adjustment of DRP’S directions after operating iny assessment. 32,44,059/- for P computed the tions of DRP, an pellant filed an ed in page 2 & 3 the Ld. AR of 24, during the t is withdrawing hroom Products 22, as it would ground relating ed, the Ld. AR of rranty provision ” in nature the hould be taken f the warranty provisions are writte revised margin comp Ld. TPO determined within the Arm’s leng same, the Ld. AR adjustment to be mad Particulars Income
Revenue from op
Sale of product
Sale of services
Other operating
Operating Assis
Other income:
Warranty provis
Total Operating Income
Total operating Cost [B]
Operating Profit C = [A -
Operating Profit / Opera
8. Finally, the AR be directed to inclu operating revenue, a company consistently judicial precedents.
9. Per contra, the computed the PLI u
Company. The Ld. D after considering the Sirona Denta n back is considered as operat putation of OP/OR would be 6.0
the range to be 5.29% to 6.82
gth range computed by TPO. In of appellant has filed the de as follows :
Amount (In INR) perations:
ts s
g revenue:
stance sion written back
[A]
18,60,04,83
72,64,920
19,32,69,75
4,75,39,584
31,81,643
B]
ating Revenue D = [C / A]
R of appellant has submitted tha ude the warranty provision w as this treatment was followe y in prior years also, which wa e Ld. AR has argued that th using draft financials provide
DRP has directed the TPO to co e figures as per audited finan al Systems Private Limited
5
ting income, the 01% and as the 2%, it would be n support of the financials and Amount (In INR)
7
0
7
4
3
24,39,90,984
22,93,26,150
1,46,64,834
6.01%
at, Ld. TPO may written back as ed by appellant as supported by he Ld. AO has ed by Assessee ompute PLI only ncials based on which the income w were no specific dir
“Warranty Provisions raised by the appella argued that since th raised before the Ld.
the matter to the Ld provisions, should no 10. Considering the decided that an op demonstrate its cas before the Ld. AO, a fresh evidences were the appeal is remitted
“Warranty Provision
“operative income” an be entertained befor agitated by the Ld. AR
11. The Ld. AO is d company and comple
Sirona Denta was computed by appellant com rections in Ld. DRP’s order w s” written back, because this g ant before the Ld. DRP. The Ld his ground of “Warranty Provi
DRP, the appellant company’s p d. TPO with the direction to loo ot be entertained by ITAT.
e facts and circumstances of pportunity is given to appella se relating to issue of “Warra as all the facts are borne out o e filed by the appellant compan d back to the Ld. AO, for the lim s” was included in earlier y nd determine the ALP. No other re the Ld. AO because this is R of appellant before ITAT.
directed to give an opportunity ete the assessment at the earlies al Systems Private Limited
6
mpany. As there with respect to ground was not . DR has finally isions” was not plea to set aside k into warranty the case, it is nt company to anty Provisions”
f record and no ny. Accordingly, mited purpose of years to reckon grounds should the only issue to the appellant st.
The appeal of purposes. Order pronoun (AMIT SHUK JUDICIAL MEM Mumbai; Dated: 08/01/2025 Poonam Mirashi, Stenographer
Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
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Sirona Denta appellant company is allowed ced in the open Court on 08/0
S
KLA)
(OMKARESHWA
MBER
ACCOUNTANT ded to :
BY ORDE
(Assistant Re
ITAT, Mu al Systems Private Limited
7
d for statistical
01/2025. AR CHIDARA)
T MEMBER
ER, gistrar) umbai