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2019 (8) TMI 708

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..... 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 receipts unrelated to the eligible business. There must be, for the application of the word "derived from", a direct nexus between profits and gains and the industrial undertakings. The authorities below therefore, came to the conclusion that because the appellant was not fulfilling any of the requisite conditions and the income was not directly derived from the business and had no direct nexus, the benefit of section .....

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..... 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 production of record we have also examined the contract or the agreement of franchisee between the assessee and Lakme saloon. The undisputed facts of the case are that the hotel business was initiated by the assessee in the year 2001 and had become operational from then without having the saloon business. The saloon business came into existence subsequently by virtue of a franchisee agreement with the Lakme in the year under .....

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..... 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 part of the hotel business such as providing food and refreshment to the inmates of the hotel and, therefore, has come to the conclusion that it cannot be said that the saloon business was an integral part of the hotel activities and, therefore, also has come to the conclusion that receipts from the saloon sections are not derived from the hotel business. While considering the case on facts, the authorities below have exami .....

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..... ing 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 the 1st day of April, 1997 and ending on the 31st day of March, 2001: Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction (whether known as a municipality, municipal corporation, notified area committee or a cantonment board or by any other name) of Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of .....

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