HUF formation

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 November 2009 I am a co-parcener in HUF of my father which is still continuing. Meanwhile about 3 years ago, I started my own HUF without the partition / dissolution of the HUF of my father.

In view of the above, please advise on the following aspects :-

1) Whether formation of HUF by me without dissolution of earlier HUF is valid and legal ?

2) Do we need to dissolve the HUF of my father and if so, to whom should the funds / assets be distributed, in what proportion and its taxability to Income Tax ?

3) Can the ITO tax the income of my HUF in my individual account without recognising HUF status in view of original HUF not being dissolved ?

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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13 November 2009 (1) If you have formed properly then it is valid as per law and it will be termed as samller huf and your father huf will be termed as Bigge huf.

(2) It is not required to dissolve the bigger huf.

(3) ITo cannnot club your huf to your individual if you have proper documents for foramtion of the same.

Querist : Anonymous

Querist : Anonymous (Querist)

14 November 2009 Dear Sir,

Thank you for your detailed reply but just need a small further clarification :-

1) I am the senior most male member in the family after my father. In the event of fathers death, can I then continue as Karta of two HUFs simultaneously viz. HUF formed by father and HUF formed by me