TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 212
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....g out of the order passed u/s. 115WE of the Income Tax Act, 1961 ["the Act"] for the AY 2006-07. 2. Briefly stated the facts of the case are that the assessee the assessee, a Public Sector Undertaking, engaged in the business of execution of works contracts for building ships and offshore platforms, filed its return of income for the AY 2006-07 on 28/11/2006 admitting NIL income. While filing the return of income the assessee has also enclosed the statement of Fringe Benefits admitting the total fringe benefits of Rs. 50,12,212/-. During the assessment proceedings, the Ld.AO on verification of the fringe benefit statement filed by the assessee along with the audit report in Form-3CD, it was noted that the assessee-company had debited an am....
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....English language meaning to it and therefore it was contended that all the activities involving construction including ship building / construction would be covered within the scope of the term 'business of construction' referred to in section 115WC(2) of the Act. On examination and verification of the submissions made by the assessee's Representative as well as the material available before him, the Ld. AO did not accept the contention of the assessee and concluded that the word 'construction' means the activity of process of making / building roads, culverts, bridges, dams residential and commercial complexes and other civil constructions and therefore, the assessee's taxable fringe benefits under the above head would be exigible @ 20% as....
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.... by raising the following grounds of appeal: "1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) is not justified in sustaining the addition of Rs. 14,29,432/- made by the AO by estimating the taxable fringe benefit value @ 20% as against 5% admitted by the appellant in respect of conveyance, tour and travel. 3. Any other grounds may be urged at the time of hearing." 5. At the outset, the Ld. Authorized Representative [AR] submitted that the assessee is engaged in the business of construction of ships which is nothing but a form of construction business. The assessee also referred to the Board Circular No.8/2005, dated 29/08/2005 and drew our attention to Q.....
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....e, the Ld. DR pleaded the view taken by the Ld. AO while making addition of Rs. 14,29,432/- @ 20% of fringe benefits on conveyance, tour and travel against 5% admitted by the assessee and confirmed by the Ld. CIT(A)-NFAC is in order and their order are required to be upheld. 7. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. The core issue before the Bench to be decided is whether the activity of building / construction of ships is covered under the word 'construction' or not and 'whether the assessee is right in admitting 5% of fringe benefits on conveyance, tour & travel as against 20% adopted by the Revenue?' In the present case there is no dispute that the ....
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.... In the instant case, there is no dispute on the fact that the assessee is involved in ship building / construction and therefore it is within the definition of the term "business of construction". Further, for understating purpose, the ordinary English language meaning of the words "construct" and "construction" is extracted from "Webster's Comprehensive Dictionary of the English Language" which is as under: "Construct: 1. To put together and set up; build; arrange; 2. To devise - 1. Anything systematically constructed or composed. 2. Psychol. A complex of mental images and impressions, deliberately synthesized in a form to aid the imagination in further speculation." "Construction: 1. The act of constructing; also, that which is const....