Section 115WC – The word ‘construction’ used in the section will have to be given its ordinary meaning, and cannot be restricted to civil constitution.
Facts:
1. The assessee company was engaged in the business of manufacturing of specialised equipment of solid waste and a liquid waste treatment for industries.
2. The A.O was of the opinion that assessee is not engaged in the business of construction hence the benefit of 5% value of fringe benefit should not be given to the assessee. The CIT(A) upheld the order of the A.O.
3. Aggrieved the assessee filed an appeal to the Hon’ble ITAT.
Held:
1. The word used in section 115WC(2)(b) is ‘construction’ and not ‘civil construction’.
2. The word ‘construction’ is not defined in the Act. Hence, the ordinary meaning of the word construction shall be considered.
3. The dictionary meaning of the word construction and construct are:
Construction: A bridge under construction building, erection, elevation, assembly, framework, manufacture, fabrication. Construct: Construct a housing estate/construct a bridge, build, erect, put up, set up, raise, elevate, establish, assemble, manufacture, fabricate, make.
4. Referring to the above definitions, it was clear that it refers to not only construction of a building but it also includes activities of assessee i.e manufacturing of specialised equipment which included fixation of some equipment to land and certain degree of civil construction.
5. Thus it was held, the assessee was said to be engaged in the business of construction and therefore covered by section 115WC(2)(b).
Note: Though the above decision relates to fringe benefit tax, it brings out an important difference between ‘construction’ and ‘civil construction’.
