However, although the principle of separation is central to company law, there are a number of situations when the company and its members can be identified together and treated as the same. State Trading Corporation of India Ltd. AIR SC It was held that As soon as citizens form a company, the rights guaranteed to them by article 19 1 c has been exercised and no restraint has been placed on the right and no infringement of that right is made.

Once a company or corporation is formed, the business which is carried on by the such company or corporation is the business of that company or corporation and is not the business of the citizens who get the company or corporation incorporated and the rights of the incorporated body must be judges on that footing and cannot be judged on the assumption that they are the rights attributed to the business of individual citizens.

AIR SC The court held that the income-tax authorities were entitled to pierce the veil of corporate entity and to look at the reality of the transaction to examine whether the corporate entity was being used for tax evasion. In this case, a separate corporate entity was brought into existence outside the taxable territory with the ulterior motive of evading the tax obligation by the assessee mills. The Supreme Court observed: But in certain exceptional cases the Court is entitled to lift the veil of corporate entity and to pay regard to the economic realities behind the legal facade.

For example, the Court has power to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation. He sold the land and timber to a company he formed and received as consideration all the fully paid shares. We guarantee that your order will reach you and will either re-ship at no additional cost or refund your money if your order doesn't arrive within 21 business days of shipment.

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