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2019 (8) TMI 708

..... ng it to be an integral part of the Hotel business which finding holds goods, the Tribunal is legally justified in holding that the receipts from saloon business are not derived from the hotel business? - HELD THAT:- The authorities below have examined the contract or franchisee agreement of the assessee with M/s. HLL, which has a separate and distinct identity from the hotel business of the appellant. The authorities below have also examined the decision of the Hon'ble Apex Court in the case of CIT vs. Sterling Foods [ 1999 (4) TMI 1 - SUPREME COURT ] wherein the Apex Court has inter alia held that the word "derived from" restricts the qualifying profits to the profits directly arising from the particular activity and not the .....

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..... the order of the Tribunal dated 22.04.2015. The appeal has been admitted on 31.08.2015 on the following questions of law:- (i). Whether the Tribunal is legally justified in denying the deduction under Section 80IB (7)(a) of the Income Tax Act on the income from the saloon section by the appellant-hotel? (ii) Whether after holding the saloon activity as desirbale and CIT (A) holding it to be an integral part of the Hotel business which finding holds goods, the Tribunal is legally justified in holding that the receipts from saloon business are not derived from the hotel business? We have heard learned counsel for both the sides at length and have also perused the material on record as well as the original record summoned before us. Upon prod .....

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..... rooms, halls, restaurant, bar etc, but it could not be said that the saloon section was the core activity of the hotel business. The Tribunal while examining the facts has also come to the conclusion that there was no material on record regarding the nature of customers who came and utilise the saloon activities. The facilities of saloon were not confined to the indoor inmates of the hotel but facilities were extended to outsiders also and therefore, could not be said that the saloon business is an integral part of the hotel activity. The Tribunal while examining the matter has also come to the conclusion that the business of hair styling, hair cutting and beauty treatment being related to cosmetics, cannot be equated with the essential par .....

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..... rovisions of section 80IB (7)(a) of the Act is quoted below: "(7) (a) The amount of deduction in the case of any hotel shall be- (a) fifty per cent of the profits and gains derived from the business of such hotel for a period of ten consecutive years beginning from the initial assessment year as is located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may, having regard to the need for development of infrastructure for tourism in any place and other relevant considerations, specify by notification in the Official Gazette and such hotel starts functioning at any time during the period beginning on the 1st day of April, 1990 and ending on the 31st day of March, 1994 or beginning on .....

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