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TMI BlogDoctrine of "Lifting the Corporate Veil" Or "Piercing the corporate veil"X X X X Extracts X X X X X X X X Extracts X X X X ..... eholders with its own legal rights and obligations. It seeks to disregard the separate personality of the company and attribute the acts of the company to those who are allegedly in direct control of its operation. The starting point of this doctrine was discussed in the celebrated case of Salomon v. A Salomon Co Ltd., [1897] AC 22. Lord Halsbury LC (paragraphs 31 33), negating the applicability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... URT, while discussing the doctrine of corporate veil, held that: 90. Generally and broadly speaking, we may say that the corporate veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented, or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fraud or improper conduct or for violation of law. Protection of public interest being of paramount importance, if the corporate personality is to be used to evade obligations imposed by law, the real state of affairs needs to be seen. The same principle applies while overseeing the compliance of applicable ethics of not permitting profit sharing or complying with the ceiling limit for the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... URT ] In Kapila Hingorani v. State of Bihar 2003 (5) TMI 359 - SUPREME COURT , this Court held as under: The proposition that a company although may have only one shareholder will be a distinct juristic person as adumbrated in Salomon v. Salomon and Co., has time and again been visited by the application of doctrine of lifting the corporate veil in revenue and taxation matters. The corporate veil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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