2011 (5) TMI 544

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....see company was not engaged in the business of construction as envisaged in clause (b) of sec. 115WC of the Act, is wholly misconceived and is in disregard of the submission made and evidence produced by the assessee.    2.  That the further finding that the drawings and designs filed only suggest that the main activities of the appellant company was manufacturing of specialized equipments. The ld. CIT(A) has failed to appreciate that the manufacturing of specialized equipment and installation thereof require lot of construction so as to enable the assessee to work out the value of FBT @ 5%. It is, therefore, prayed that the value of FBT on tour and travel expenses be directed to be worked out @ 5%." 2. Impugned assessment ....

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....e construction as claimed by the assessee, hence, the benefit of 5% value of fringe benefit cannot be given to the assessee. 3. Before CIT(A), it has been the case of the assessee that AO did not appreciate the factual aspect of the assessee's case. The activities of the assessee of installation of "Twin Wire Belt Filter Press" and "Upward Flow Anaerobic Sludge Bed Reactors (USAB)", required lot of civil construction, without which installation of treatment plant could not have been possible. The assessee also submitted the drawings to substantiate its argument that process of installation includes lot of construction. Reference was also made to the definitions of word "construction" and "construct" from New Webster's Dictionary of English....

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....contended that assessee should be interpreted to be carrying on business of construction hence, fringe benefit should be valued @ 5% and not at 20% as assessed by the AO. Ld. CIT(A) has rejected such contention of the assessee. He observed that the activity stated by the assessee to be involving civil construction activities are ancillary an incidental in nature towards performing the main and only activity of manufacturing all waste treatment equipment to be supplied to the industries and communities. Therefore, assessee cannot be said to be engaged in the business of construction being an employer as envisaged u/s 115WC(2)(b) and in this manner ld. CIT(A) has upheld the action of AO. The assessee is aggrieved, hence has raised aforementio....

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...., the value of fringe benefit shall be taken @ 5%. The question before us is that whether or not assessee engaged in the business of construction. The word "construction" has not been defined in the Act. Therefore, its ordinary meaning in common parlance has to be taken. The definitions as given in aforementioned two dictionaries have already been reproduced. If those definitions are kept in mind, the word "construct" cannot be restricted only to civil construction. It include in its ambit pile or put together, build, make, to form by putting together parts; frame; devise; to draw, as a figure, so as to fulfill given conditions, the result of intellectual perception and consideration of things and ideas receive through the senses. It also i....