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“lifting of corporate veil”

Judicial DoctrinesVodafoneVodafone47 judgments

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

Indus Towers Ltd., Gurgaon vs. DCIT Circle 12(1), New Delhi

In the result, the appeal of the revenue is dismissed

ITA 1962/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

Russel Credit Limited, Kolkata vs. PCIT, Kol, Kolkata

The appeal of the assessee is allowed

ITA 407/KOL/2023[2018-19]Status: DisposedITAT Kolkata23 Oct 2024AY 2018-19

Bench: Shri Rajpal Yadav & Shri Sanjay Awasthiassessment Year: 2018-19

For Appellant: J.P. Khaitan, Sr. CounselFor Respondent: Abhijit Kundu, CIT DR
Section 143(3)Section 263

genuineness of transactions in unlisted shares itself is questionable; or ii. the transfer of unlisted shares is related to an issue pertaining to lifting of corporate veil, or iii. the transfer of unlisted shares is made along with the control and management of underlying business and the Assessing Officer would

ITO, Ward-52(1), New Delhi vs. Arti Jindal, Delhi

ITA 1502/DEL/2021[2014-2015]Status: DisposedITAT Delhi02 Nov 2023AY 2014-2015

Bench: Shri N. K. Billaiya & Shri Anubhav Sharma

Section 143(1)Section 143(3)Section 148

therefore, was bound to create reserve and surplus and should not have been recorded at Nil value in garb of gift. This justifies lifting of corporate veil as this was a 5 case of using a colourable device in the form of using Glebe and the Trust as special purpose ... primarily relied the order of ld. AO submitting that the ld. AO had made a very meticulous examination of transactions while lifting the corporate veil. He submitted that the case of assessee is based upon the arrangement which stands not proved. It was submitted that Ld. CIT(A) has fallen

Thr Infrastructure Pte Ltd, Gurgaon vs. DCIT, Cir.-3(1)(1), Intl Tax, New Delhi

In the result, the appeal of the assessee is allowed

ITA 1915/DEL/2022[201-18]Status: DisposedITAT Delhi12 May 2023

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. Gangadhar Panda, CIT-DR
Section 143(3)

case of Vodafone International Holdings B.V. v. Union of India (supra), specifically para 67 of the said judgment for the principle of lifting of corporate veil or the doctrine of substance over form. The Assessee, too, is seeking to rely upon the said judgment in extenso. It is further submitted

Media Research Users Council, Mumbai vs. ADIT (E) 1(1), Mumbai

Appeal of the revenue is dismissed

ITA 6459/MUM/2012[2006-07]Status: DisposedITAT Mumbai29 Mar 2022AY 2006-07

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble & Media Research Users Council V. Addl. Dit(E)– 1(1) 128, Tv Industrial Estate Piramal Chambers, Lalbaug S.K. Ahire Marg, Worli Mumbai – 400 012 Mumbai – 400012 Pan: Aaatm5433F (Appellant) (Respondent) Media Research Users Council V. Addl. Dit(E)– Range 1 128, Tv Industrial Estate Piramal Chambers, Lalbaug S.K. Ahire Marg, Worli Mumbai – 400 012 Mumbai – 400012 Pan: Aaatm5433F (Appellant) (Respondent)

For Appellant: Shri Niraj ShethFor Respondent: Shri C.T. Mathews
Section 11Section 12ASection 13Section 13(1)(c)Section 13(3)(e)Section 25

section 2(24)(iv) and section 64, wherein even indirect holding is to be had regard to. It is further submitted that lifting of corporate veil of TIPL is not permissible in the present case. Corporate veil can be lifted only in cases where an attempt is made to defraud ... Assessing Officer observed that HRG falls under the related person category within the meaning of section 13(3) of the Act, by lifting the corporate veil, considering the fact that the key director (Shri Shekar Swamy) of the assessee company, who held indirect substantial interest in the HRG through TIPL

Media Research Users Council, Mumbai vs. Addl DIT (E) RG 1, Mumbai

Appeal of the revenue is dismissed

ITA 7108/MUM/2010[2007-08]Status: DisposedITAT Mumbai29 Mar 2022AY 2007-08

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble & Media Research Users Council V. Addl. Dit(E)– 1(1) 128, Tv Industrial Estate Piramal Chambers, Lalbaug S.K. Ahire Marg, Worli Mumbai – 400 012 Mumbai – 400012 Pan: Aaatm5433F (Appellant) (Respondent) Media Research Users Council V. Addl. Dit(E)– Range 1 128, Tv Industrial Estate Piramal Chambers, Lalbaug S.K. Ahire Marg, Worli Mumbai – 400 012 Mumbai – 400012 Pan: Aaatm5433F (Appellant) (Respondent)

For Appellant: Shri Niraj ShethFor Respondent: Shri C.T. Mathews
Section 11Section 12ASection 13Section 13(1)(c)Section 13(3)(e)Section 25

section 2(24)(iv) and section 64, wherein even indirect holding is to be had regard to. It is further submitted that lifting of corporate veil of TIPL is not permissible in the present case. Corporate veil can be lifted only in cases where an attempt is made to defraud ... Assessing Officer observed that HRG falls under the related person category within the meaning of section 13(3) of the Act, by lifting the corporate veil, considering the fact that the key director (Shri Shekar Swamy) of the assessee company, who held indirect substantial interest in the HRG through TIPL

Puran Associates Pvt. Ltd., New Delhi vs. DCIT, Circle-20(1), New Delhi

In the result, the appeal of the assessee is allowed partly

ITA 2087/DEL/2018[2014-15]Status: DisposedITAT Delhi14 Oct 2021AY 2014-15

Bench: Shri Kul Bharat & Shri O.P. Kant[Through Video Conferencing] Assessment Year: 2014-15

Section 111ASection 143(3)Section 14A

genuineness of transactions in unlisted shares itself is questionable; or ii. the transfer of unlisted shares is related to an issue pertaining to lifting of corporate veil; or iii. the transfer of unlisted shares is made along with the control and management of underlying business; and the Assessing Officer would