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2002 (9) TMI 39 - HC - Income TaxRevenue or capital expenditure - payment made by the company to brothers - The finding that the payment made by the company to these brothers is in the nature of revenue receipt in the hands of the brothers, would not negate the separate juristic existence of the company. The company continues to remain a legal entity with a right to hold property, to contract, etc. The true character of the payment made by it to these brothers who are shareholders and directors and who as partners of the firm own the buildings and the equipment used by the company for running the hotel, has to be judged by looking at the reality after removing or piercing the veil of the company, as the circumstances of the case justify such an exercise. The purpose of the deed of compensation in reality was only to screen the payment made under that deed from liability to income-tax in the hands of the assessee.
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