TaxTMI 
TaxTMI 
2019 (8) TMI 708
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....in Income Tax Appeal No.213 of 2015, treating as a leading case. This appeal under Section 260A of the Income Tax Act, (hereinafter referred to as the 'Act') has been filed by the assessee against 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 busin....
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....g in the year 2005-06 whereas hotel is already functioning from the year 2001 as a licencesed three star hotel. Upon examination, it comes to the light that the core business of the hotel business was the hiring of 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 act....
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....he business and had no direct nexus, the benefit of section 80IB (7)(a) of the Income Tax Act, 1961 was rightly denied. As such the assessee clearly was not eligible for it. The relevant part of the provisions 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....