TMI Blog2019 (8) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... w 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 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 80IB ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 part of the hotel business such as providing food and refreshment to the inmates of the hotel and, therefore, has come to the conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 the 1st day of April, 1997 and ending on the 31st day of March, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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