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“lifting of corporate veil”

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The decision most relied on for lifting of corporate veil is McDowell & Co. Ltd. v. CTO (154 ITR 148), cited in 741 judgments on BharatTax.

Leading authorities on lifting of corporate veil

McDowell & Co. Ltd. v. CTO
154 ITR 148 · 1985 · Supreme Court
741
citing judgments

The Supreme Court held that while legitimate tax planning is permissible, transactions structured as a "colourable device" or "subterfuge" solely to avoid tax are impermissible. It mandates a judicial shift to look beyond the form to the substance of a transaction, allowing the lifting of the corporate veil in tax evasion arrangements.

CIT v. Kundan Investment Ltd.
263 ITR 626 · 2003 · High Court
62
citing judgments

An assessee must prove the identity of the subscribers to share capital, their creditworthiness, and the genuineness of the transaction for cash credits under section 68. Establishing identity alone is insufficient, and the Income Tax Officer can lift the corporate veil to ascertain the reality of the transaction.

CIT v. Active Traders (P.) Ltd.
214 ITR 583 · 1995 · High Court
55
citing judgments

When a sum is credited on account of share capital or share premium, the assessee must establish the existence, identity, genuineness, and creditworthiness of the share applicants, going beyond mere submission of documents. The Assessing Officer has the power to investigate and lift the corporate veil to ascertain the bonafides of such transactions.

CIT v. Sahu Investment Mutual Benefit Co Ltd.
396 ITR 595 · 2017 · High Court
12
citing judgments

The doctrine of 'lifting the corporate veil' is not applied as a matter of course and requires cogent and compelling reasons with detailed factual investigation. Payments made to related parties cannot be disallowed without proving they were not for bonafide reasons.

Judgments citing lifting of corporate veil

Deputy Commissioner of Income Tax, Central Circle 3, Delhi vs. Super Cassettes Industries Private Limited, Delhi

ITA 2512/DEL/2023[2014-15]Status: DisposedITAT Delhi25 Sept 2025AY 2014-15

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

Deputy Commissioner of Income Tax, Central Circle 3, Delhi vs. Super Cassettes Industries Private Limited, Delhi

ITA 2511/DEL/2023[2013-14]Status: DisposedITAT Delhi25 Sept 2025AY 2013-14

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

Deputy Commissioner of Income Tax, Central Circle-3, Delhi vs. Bhushan Dua, New Delhi

ITA 2510/DEL/2023[2013-14]Status: DisposedITAT Delhi25 Sept 2025AY 2013-14

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

Deputy Commissioner of Income Tax, Central Circle 3, Delhi vs. Bhushan Dua, New Delhi

ITA 2509/DEL/2023[2014-15]Status: DisposedITAT Delhi25 Sept 2025AY 2014-15

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

Mahadhan Agritech Limited (Formerly Known As Smartchem Technologies Ltd), Mumbai vs. Assistant Commissioner of Income Tax Central Circle 8(1), Mumbai

In the result, the appeals filed by the assessee are

ITA 5423/MUM/2024[2020-21]Status: DisposedITAT Mumbai24 Jul 2025AY 2020-21
Section 115JSection 132Section 143(3)Section 153ASection 69A

could be no question of tax planning] (viii) Just because the scheme was approved by the NCLT, the same would not prevent the lifting of corporate veil by the tax authority. Issue 3 – Addition u/s 69A on alleged inflated capital expenditure (i) Whatsapp messages from mobile of Mr. Pandurang Langde

Mahadhan Agritech Limited (Formerly Known As Smartchem Technologies Limited ), Mumbai vs. Deputy Commissioner of Income Tax, Central Circle -8(1), Mumbai

In the result, the appeals filed by the assessee are allowed, and the appeal filed by the Revenue is dismissed

ITA 3937/MUM/2024[2019-20]Status: DisposedITAT Mumbai24 Jul 2025AY 2019-20

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 115JSection 132Section 143(3)Section 153ASection 69A

could be no question of tax planning] (viii) Just because the scheme was approved by the NCLT, the same would not prevent the lifting of corporate veil by the tax authority. Issue 3 – Addition u/s 69A on alleged inflated capital expenditure (i) Whatsapp messages from mobile of Mr. Pandurang Langde

DCIT Central Circle 8(1), Mumbai vs. Mahadhan Agritech Limited, Pune

In the result, the appeals filed by the assessee are allowed, and the appeal filed by the Revenue is dismissed

ITA 3569/MUM/2024[2019-20]Status: DisposedITAT Mumbai24 Jul 2025AY 2019-20

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 115JSection 132Section 143(3)Section 153ASection 69A

could be no question of tax planning] (viii) Just because the scheme was approved by the NCLT, the same would not prevent the lifting of corporate veil by the tax authority. Issue 3 – Addition u/s 69A on alleged inflated capital expenditure (i) Whatsapp messages from mobile of Mr. Pandurang Langde

Mahadhan Agritech Limited (Formerly Known As Smartchem Technologies Ltd, Mumbai vs. Commissioner of Income Tax(Appeal)--50, Mumai

In the result, the appeals filed by the assessee are allowed, and the appeal filed by the Revenue is dismissed

ITA 2229/MUM/2024[2018-19]Status: DisposedITAT Mumbai24 Jul 2025AY 2018-19

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 115JSection 132Section 143(3)Section 153ASection 69A

could be no question of tax planning] (viii) Just because the scheme was approved by the NCLT, the same would not prevent the lifting of corporate veil by the tax authority. Issue 3 – Addition u/s 69A on alleged inflated capital expenditure (i) Whatsapp messages from mobile of Mr. Pandurang Langde

Mahadhan Agritech Limited (Formerly Knwon As Smartech Technologies Ltd ), Mumbai vs. Commissioner of Income Tax (Appeals)-Mumbai-50, Mumbai

In the result, the appeals filed by the assessee are

ITA 2228/MUM/2024[2016-17]Status: DisposedITAT Mumbai24 Jul 2025AY 2016-17
Section 115JSection 132Section 143(3)Section 153ASection 69A

could be no question of tax planning] (viii) Just because the scheme was approved by the NCLT, the same would not prevent the lifting of corporate veil by the tax authority. Issue 3 – Addition u/s 69A on alleged inflated capital expenditure (i) Whatsapp messages from mobile of Mr. Pandurang Langde

Mahadhan Agritech Limited (Formerly Known As Smartech Technologies Ltd, Mumbai vs. Commissioner of Income Tax (Appeals)-Mumbai.50, Mumbai

In the result, the appeals filed by the assessee are allowed, and the appeal filed by the Revenue is dismissed

ITA 2227/MUM/2024[2017-18]Status: DisposedITAT Mumbai24 Jul 2025AY 2017-18

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 115JSection 132Section 143(3)Section 153ASection 69A

could be no question of tax planning] (viii) Just because the scheme was approved by the NCLT, the same would not prevent the lifting of corporate veil by the tax authority. Issue 3 – Addition u/s 69A on alleged inflated capital expenditure (i) Whatsapp messages from mobile of Mr. Pandurang Langde

Pradeep Wig, New Delhi vs. ACIT Central Circle-5, New Delhi

The appeals of the Revenue are dismissed

ITA 406/DEL/2021[2012-13]Status: DisposedITAT Delhi29 Apr 2025AY 2012-13

Bench: Shri M. Balaganesh & Shri Anubhav Sharma

property should be assessed in the hands of the owner. In this case, the appellant has been held to be beneficial owner after lifting of corporate veil in view of decision of Hon’ble Supreme Court in the case of Mc Dowell & Co. Ltd vs Commercial tax Officer ... Court in the case of Mc Dowell & Co. Ltd. Vs. Commercial tax Officer [1985] 154 IT'R 148 (SC), the Assessing Officer can lift the corporate veil and income of the company can be assessed in the hands of the real owner, the shareholders in this case. It is held

Mohit Gupta HUF, Delhi vs. ITO Ward 44(6), Delhi

ITA 2511/DEL/2024[2015-16]Status: DisposedITAT Delhi18 Mar 2025AY 2015-16

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

Chetna Sundaram, Janak Puri Delhi vs. DCIT, Circle 70(1), Delhi

ITA 2512/DEL/2024[2012-13]Status: DisposedITAT Delhi10 Mar 2025AY 2012-13

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

Devender Kumar, Rohtak vs. ITO, Ward 1, Rohtak

ITA 2509/DEL/2024[2012-13]Status: HeardITAT Delhi06 Mar 2025AY 2012-13

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

ACIT, New Delhi vs. Smt. Shashi Mehta, New Delhi

ITA 271/DEL/2015[2011-12]Status: DisposedITAT Delhi19 Feb 2025AY 2011-12

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

Paramasivam Mahalingam, Ghaziabad vs. ACIT, Central Circle-6, New Delhi

ITA 281/DEL/2020[2014-15]Status: DisposedITAT Delhi17 Jan 2025AY 2014-15

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

having its own independent existence and therefore its income cannot be taxed in the hands of SCIPL is not acceptable. The concept of lifting the corporate veil disregards separate identity of the company and looks behind true owners or real person who are in control of the company. Whenever ... dishonest use is made to the legal entity like BDML, the tax authorities can always lift the corporate veil to go to the root of the transaction. In the present case BDML did not do any business except for helping the assessee to evade tax to divert licensing income

ACIT, Faizabad vs. M/S. Saket Foods Pvt. Ltd., Bahraich

In the result, both appeals of the Revenue are dismissed

ITA 326/LKW/2020[2012-13]Status: DisposedITAT Lucknow31 Dec 2024AY 2012-13

Bench: Shri Kul Bharat & Shri Anadee Nath Misshraacit, Gonda M/S. Shree Rameshwar V. Income Tax Office, Civil Lines, Lal Foods Pvt. Ltd Faizabad-224001. Chhawani Bazar, Bahraich-271801. Pan:Aancs3697P (Appellant) (Respondent) Acit, Gonda M/S. Saket Foods Pvt V. Income Tax Office, Civil Lines, Ltd Faizabad-224001. Chhawani Bazar, Bahraich-271801. Pan:Aadcs0365G (Appellant) (Respondent) Appellant By: Shri Rakesh Garg, Adv Respondent By: Shri Sanjeev Krishna Sharma, Addl. Cit(Dr) Date Of Hearing: 30 12 2024 Date Of Pronouncement: 31 12 2024 O R D E R

For Appellant: Shri Rakesh Garg, AdvFor Respondent: Shri Sanjeev Krishna Sharma, Addl
Section 143(3)Section 147Section 148

facts in comprehending the total facts indicating evasion of tax -by corporate bodies through mischievous modes and it is a case of lifting of corporate veil. 8. The appellant craves to modify/amend/change/enhance the grounds of appeal during the pendency of the appeal. ITA. No.326/LKW/2020 ... facts in comprehending the total facts indicating evasion of tax by corporate bodies through mischievous modes and it is a case of lifting of corporate veil. 8. The appellant craves to modify/amend/change/enhance the grounds of appeal during the pendency of the appeal.” 2. At the outset, the Authorized Representative

ACIT, Faizabad vs. M/S. Shree Rameshwar Lal Foods Pvt. Ltd., Bahraich

In the result, both appeals of the Revenue are dismissed

ITA 325/LKW/2020[2012-13]Status: DisposedITAT Lucknow31 Dec 2024AY 2012-13

Bench: Shri Kul Bharat & Shri Anadee Nath Misshraacit, Gonda M/S. Shree Rameshwar V. Income Tax Office, Civil Lines, Lal Foods Pvt. Ltd Faizabad-224001. Chhawani Bazar, Bahraich-271801. Pan:Aancs3697P (Appellant) (Respondent) Acit, Gonda M/S. Saket Foods Pvt V. Income Tax Office, Civil Lines, Ltd Faizabad-224001. Chhawani Bazar, Bahraich-271801. Pan:Aadcs0365G (Appellant) (Respondent) Appellant By: Shri Rakesh Garg, Adv Respondent By: Shri Sanjeev Krishna Sharma, Addl. Cit(Dr) Date Of Hearing: 30 12 2024 Date Of Pronouncement: 31 12 2024 O R D E R

For Appellant: Shri Rakesh Garg, AdvFor Respondent: Shri Sanjeev Krishna Sharma, Addl
Section 143(3)Section 147Section 148

facts in comprehending the total facts indicating evasion of tax -by corporate bodies through mischievous modes and it is a case of lifting of corporate veil. 8. The appellant craves to modify/amend/change/enhance the grounds of appeal during the pendency of the appeal. ITA. No.326/LKW/2020 ... facts in comprehending the total facts indicating evasion of tax by corporate bodies through mischievous modes and it is a case of lifting of corporate veil. 8. The appellant craves to modify/amend/change/enhance the grounds of appeal during the pendency of the appeal.” 2. At the outset, the Authorized Representative

Indus Towers Limited (Formerly Known As Bharti Infratel Ltd and As Successor in Interest of Erstwhile Indus Tower Ltd), Gurugram, Haryana vs. DCIT, Circle 12(1), New Delhi

In the result, the appeal of the revenue is dismissed

ITA 2762/DEL/2023[2010-11]Status: DisposedITAT Delhi10 Dec 2024AY 2010-11

Bench: Shri M. Balaganesh & Shri Vimal Kumarindus Towers Ltd (Formerly Vs. Dcit, Known As Bharti Infratel Ltd), Circle-12(1), 4Th Floor, Dlf Cybercity, New Delhi Building No. 10, Tower A, Dlf Qe, So Gurgaon, Haryana (Appellant) (Respondent) Pan: Aadcv0274F Acit, Vs. Indus Towers Ltd, 4Th Floor, Dlf Cybercity, Central Circle-10, New Delhi Gurgaon, Haryana (Appellant) (Respondent) Pan: Aadcv0274F Indus Towers Ltd (Formerly Vs. Dcit, Known As Bharti Infratel Ltd), Circle-12(1), 4Th Floor, Dlf Cybercity, New Delhi Building No. 10, Tower A, Dlf Qe, So Gurgaon, Haryana (Appellant) (Respondent) Pan: Aadcv0274F Assessee By : Shri Ajay Vohra, Sr. Adv Shri Rohit Jain, Adv Shri Deepesh Jain, Adv Ms. Shaurya Jain, Ca Revenue By: Shri Mukesh Kumar Jain, Cit Dr Date Of Hearing 12/09/2024 Date Of Pronouncement 10/12/2024

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Mukesh Kumar Jain, CIT DR
Section 115JSection 139(5)Section 142Section 143(3)Section 148

erroneous on the face of records. The action of considering the two steps as composite/ single step tantamount to ignoring the existence and lifting of corporate veil of, inter alia, the TowerCos which is blatantly contrary to the order of the High Courts and in clear disregard to the express

ACIT, Circle 10, New Delhi vs. Indus Tower Limited, Gurgaon

In the result, the appeal of the revenue is dismissed

ITA 2212/DEL/2023[2010-11]Status: DisposedITAT Delhi10 Dec 2024AY 2010-11

Bench: Shri M. Balaganesh & Shri Vimal Kumarindus Towers Ltd (Formerly Vs. Dcit, Known As Bharti Infratel Ltd), Circle-12(1), 4Th Floor, Dlf Cybercity, New Delhi Building No. 10, Tower A, Dlf Qe, So Gurgaon, Haryana (Appellant) (Respondent) Pan: Aadcv0274F Acit, Vs. Indus Towers Ltd, 4Th Floor, Dlf Cybercity, Central Circle-10, New Delhi Gurgaon, Haryana (Appellant) (Respondent) Pan: Aadcv0274F Indus Towers Ltd (Formerly Vs. Dcit, Known As Bharti Infratel Ltd), Circle-12(1), 4Th Floor, Dlf Cybercity, New Delhi Building No. 10, Tower A, Dlf Qe, So Gurgaon, Haryana (Appellant) (Respondent) Pan: Aadcv0274F Assessee By : Shri Ajay Vohra, Sr. Adv Shri Rohit Jain, Adv Shri Deepesh Jain, Adv Ms. Shaurya Jain, Ca Revenue By: Shri Mukesh Kumar Jain, Cit Dr Date Of Hearing 12/09/2024 Date Of Pronouncement 10/12/2024

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Mukesh Kumar Jain, CIT DR
Section 115JSection 139(5)Section 142Section 143(3)Section 148

erroneous on the face of records. The action of considering the two steps as composite/ single step tantamount to ignoring the existence and lifting of corporate veil of, inter alia, the TowerCos which is blatantly contrary to the order of the High Courts and in clear disregard to the express