- 91 -
Hong Kong] would be considered 'manufacturing' in the broadest
engineering sense". Nonetheless, Dr. Philpott testified, and
respondent argues, that even though those operations were part of
the manufacturing process, they do not by themselves constitute
the manufacture of sunglasses.
The analyses of respondent and her expert Dr. Philpott are
based on their belief that there is a distinction between a
company that is engaged in manufacturing and one that manufac-
tures a product or is considered a manufacturer of a product.
While any distinctions among the terms "manufacturing",
"manufacturer", and "manufacture" may be important to an engineer
like Dr. Philpott, we do not find any such distinctions to be
important to our determination of whether the respective sunglass
assembly operations of B&L Ireland and B&L Hong Kong were
generally considered to constitute the manufacture of sunglasses
for purposes of section 954(d)(1) and section 1.954-3(a)(4)(iii),
Income Tax Regs. In fact, the legislative history of subpart F
uses all three words interchangeably. See S. Rept. 1881, supra,
1962-3 C.B. 703, 790, 949. We do not believe that Congress in
enacting section 954(d)(1) or the Treasury in promulgating
section 1.954-3(a)(4)(iii), Income Tax Regs., intended to draw
such technical engineering distinctions among those three words.
We rely, inter alia, on the admissions by respondent and her
expert that the respective sunglass assembly operations conducted
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