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2015 (4) TMI 1274 - AT - Income TaxAllowability of deduction u/s 80IB(7)(a) - income earned out of “saloon” business activity of the assessee - HELD THAT:- The core activity of the hotel business include a hiring of rooms, halls, restaurant, bar etc. integral or core activity of the hotel business the saloon section also would have started along with hotel prior to the March, 2001. There are no facts on the records regarding the profile of the customers to the said saloon activities. It is not the case of the assessee that the users of the saloon are only the inmates of the hotel and the same is not open to the outsiders. In that case, where the saloon is not closed for the outsiders, the ‘saloon’ cannot be said to be the integral part of the hotel activity. The same should be considered on indifferent business activity. We have also analyzed if the saloon activities i.e. hair dressing, hair dying, trading of the Lakme products this saloon by way of franchisee agreement are akin to the restaurant and bar sections of the said hotel business. In our opinion, the hair dressing/dying etc being related to cosmetics, shall not be equated to the food and drinking sections. These are necessities of the hotel business unlike saloon section which is merely desirable to hotel business. From this point of view also, the saloon section cannot be described having close nexus to the hotel activities. Therefore, the receipts from the ‘saloon’ section are not ‘derived from’ the hotel business. Regarding learned counsel’s argument relating to relying on the cited orders of the Tribunal, we find the same is misplaced. It is not the case that the AO denied deduction in respect of the eligible hotel receipts of the assessee. What is denied only in respect of a source of income i.e. saloon activity. Therefore, cited judgments by the assessee’s counsel are misplaced. Thus, relevant arguments of the Ld. Counsel are dismissed. Therefore, we are of the considered opinion that for above reasons also, the order of the Ld. CIT (A) fair and reasonable and it does not call for any interference. There is no issue raised before us by the assessee about the jurisdiction, qua the provisions of section 154 of the Act. Therefore, we are desist from entering into relevant debate - Decided against assessee.
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