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Schedule III of the Companies (Profits) Surtax Act, 1964 - Special deduction - Assessment years 1964-65 and 1965-66 - Assessee claimed rebate on its share income from firm manufacturing super enameled copper wire - Tribunal recorded finding of fact that item manufactured by firm clearly fell within scope of item 16, read with item 6 of III Schedule - Whether, in view of aforesaid finding, Tribunal was justified in allowing rebate - Held, yes FACTS The assessee, a partner in 'E' firm claimed that in respect of the share of income received by it from the partnership which was engaged in the manufacture of super-enamelled copper wire, it was entitled to a rebate of surtax as well in the computation of the company's total income as was attributable to the business of manufacture or production of super-enamelled copper wire. The assessee also claimed deduction under section 80E of the Income-tax Act. The claim of the assessee was ignored by the Surtax officer as well as by the ITO. On appeals, the AAC came to the conclusion that the assessee was not entitled to the rebate claimed. On second appeal, the Tribunal came to the finding of fact that the super-enamelled copper wire produced by the firm constituted a basic material required in connection with the generation of electricity and transmission thereof, that such wires were used in electrical generators, motors and transformers, that the super-enamelled wire manufactured by the firm was a component part in various items of equipment used in the generation and transmission of electricity, that the super-enamelling done to the copper wire was only with a view to make it fit for being utilised in transformers and other equipment for the generation and transmission of electricity and that this process would not be essential for the use of copper wire for any other purpose. The Tribunal further expressed that the product manufactured by the assessee was also in a completely finished from and it was ready for fitment into other electrical equipment without any further process being necessary therefor. With this finding of fact, the Tribunal held that the items manufactured by the assessee clearly fell within the scope…

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