9911796707
TMI Blog1993 (8) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... at 25 per cent of the value of fixed assets limited to a ceiling of Rs. 25 lakhs per unit be offered to all new units set up on or after October 1, 1988 for a period up to March 31, 1993. (b) In lieu of the development loan since withdrawn, the ceiling on sales tax exemption offered to medium and large scale industry is enhanced from Rs. 50 lakhs to Rs. 100 lakhs. (c) All existing and new industries are exempted from power cut up to March 31, 1993. The above special and additional package of incentives are extended to industrial units other than cement industry but set up on or after October 1, 1988 in Gulbarga District, mutatis mutandis." This order was made, since the Central investment subsidy was discontinued with effect from O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Karnataka State Financial Corporation earlier to the said date; consequently a subsidy of only 15 per cent was sanctioned in terms of an earlier Government order of the year 1988. In the statement of objections filed by the respondents, it is explained that "the words 'set up' used in the Government order dated November 28, 1989 means effective steps taken to acquire land or shed and obtain financial sanction from financial institutions". According to the respondents, the contention of the petitioner that the words "set up" should be constituted as "starting commercial production" is liable to be rejected. Mr. Basavaprabhu Patil contended that, an industry cannot be considered as having been set up, only because it obtained a loan fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Wealth-tax Act the language used in the said provision was: "....... net wealth of a company on an industrial undertaking as is employed by it in a new and separate unit set up after (underlining* is mine) At page 481 of ITR; 511 of AIR, the Supreme Court held: "A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up. It is only when the unit has been put into such a shape that it can start functioning as a business or a manufacturing organisation that it can be said that the unit has been set up. The expression used in the proviso, under which the period for which the exemption is available is to be determined, is not the same as that used in the principal clause. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , before becoming functional, cannot make it the unit having been "set up". In the instant case, certificate of registration as a small-scale/tiny unit was effective only from April 1, 1989. Electricity was sanctioned only on February 8, 1989. Till at least power was actually supplied, the industrial unit cannot be held to be ready to start its functions. Availability of electricity is one of the several ingredients that go into the setting up of the unit; it is not possible to say that the unit was "set up", without the supply of electricity at all; the unit is not established, until it has the requisite power supply to operate the machinery. Therefore, it can be safely said that at least till the supply of electricity was sanctioned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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