S.P. Goyal, J.
1. This judgment will dispose of six references, I.T. Ref. Nos. 59 to 64 of 1977, relating to the assessment years 1966-67 to 1971-72, as an answer to the following two questions referred to us, first one in Nos. 59 and 60 and the second in Nos. 61 to 64, depends upon the interpretation of item No. 7 of the Fifth Schedule of the Income-tax Act :
'1. Whether, on the facts and in the circumstances of the case, the assessee-company was entitled to the benefits conferred by the provisions of Sections 33(1)(iii)(c)(a) and 80E of the Income-tax Act, 1961 ?
2. Whether on facts and in the circumstances of the case, the asses-see-company was entitled to the benefits conferred by the provisions of Sections 33(1)(b)(B)(i) and 80I of the Income-tax Act, 1961 ?'
2. The assessee is engaged in the manufacture and sale of insulated copper wires. It claimed itself to be a priority industry within the meaning of the provisions of Section 33(1)(iii)(c)(A) and 80E read with item No. 7 of the Fifth Schedule for the first two years and Section 33(1)(b)(B)(i) and Section 80I read with item No. 17 of the Sixth Schedule in the latter four years. The said item No. 7 covers the industry engaged in the manufacture of the equipment for the generation and transmission of electricity, including transmission cables and transmission towers. The stand of the assessee was that since the copper and aluminium wires manufactured by it were covered by the word, 'cables' so this industry was entitled to the benefits available to the priority industry. The Tribunal upheld the claim of the assessee on two grounds. Firstly, that the particular descriptive nature of the cables, or the uses to which it is to be put by the purchaser, is not a material consideration in the determination of the nature of the products manufactured and the fact that thewires manufactured by the assessee are cables of versatile utility cannot be held to be a disqualification for the purposes of tax benefit to which the company as manufacturer may otherwise be entitled. Secondly, that in the previous two assessments it has already been held that the assessee was entitled to the benefits of priority industry, and, as no new facts had come into existence since then, the earlier decision was binding on the parties. The view of the Tribunal that the industry of the assessee was covered by item No. 7 cannot be sustained on either of the grounds. Item No. 7 essentially covers the equipment for the generation and transmission of electricity. Though it is provided in it that the equipment will include transformers, cables and transmission towers, yet, these cables, etc., would be covered by this item only if they are meant for generation and transmission of electricity and not otherwise.
3. The learned counsel for the respondent, however, urged that the very fact that the item manufactured is a cable would qualify the industry to be termed as a priority industry because all cables are included in the word 'equipment' by the phraseology used in the item and it would not be further necessary to show that the cables manufactured are meant for the generation and transmission of electricity. We are unable to subscribe to this view. There can be no manner of doubt that the cables would be an equipment within the meaning of item No. 7 but an industry manufacturing them would not be entitled to claim itself a priority industry unless those cables are meant for the generation and transmission of electricity. As mentioned in the statement of the case, the assessee-company was manufacturing insulated copper and aluminium wires which were not meant to be used for the generation and transmission of electricity. As such these would not be covered by the said item No. 7.
4. The second reason given by the Tribunal, that the decision relating to the earlier assessment year 1965-66 would bind the parties as no fresh facts had come into existence, is equally unsustainable. It was specifically urged before the Tribunal that, in the earlier years, the ITO had not dealt with this issue and the AAC refused to entertain the ground with the result that there was neither any enquiry nor any finding by the said authorities. The Tribunal for the first time, on appraisal of the facts available on the record gave the finding that the assessee was manufacturing aluminium cables which were used in the transmission of electricity. On the contrary, in the present cases, the ITO after conducting proper enquiry on the basis of the assessee's sale account has come to the conclusion that the assessee was manufacturing copper wires of a particular type known as winding wires which were exclusively used in the manufacture of different type of gadgets and not for the purpose of generationand transmission of electricity. It is, therefore, evident that there were fresh facts discovered on the basis of which the ITO and the AAC held that the cables manufactured by the assessee were not covered by item No. 7 and the Tribunal's observations were without any basis and wholly contrary to record.
5. For the reasons recorded above, both the questions noted above are answered in favour of the Revenue and against the assessee. No costs.
Prem Chand Jain, J.
6. I agree.