HUF SHARE OF PROFIT 10(2)
This query is : Resolved
26 July 2010
Hello,
I Want To Know That HUF Have Accumulated Profit Of Rs. 25 Crores of Past Years.
Now in The F.Y. 2009-10 Profit of Rs. 28Lacs.
Now Karta Want to Share the Profit & Giving Credit to Individual Accounts.
I Mean HUF Have 4 Members Along With Karta.
In The Year 2009-10 Karta Distributed Rs. 7 Lacs to Each.as Share of profit.
Which is Exempt Under Section 10(2).
Now If Karta Also Want To Distribute The Accumulated profit of Rs. 1 Crores From 25 Crores.(Capital Account.
Then also Wheather it is Exempt in Hands of members or it’s a Partition of HUF & Hence Taxable in Hands of Members.
I Want To Know That HUF Have Accumulated Profit Of Rs. 25 Crores of Past Years.
Now in The F.Y. 2009-10 Profit of Rs. 28Lacs.
Now Karta Want to Share the Profit & Giving Credit to Individual Accounts.
I Mean HUF Have 4 Members Along With Karta.
In The Year 2009-10 Karta Distributed Rs. 7 Lacs to Each.as Share of profit.
Which is Exempt Under Section 10(2).
Now If Karta Also Want To Distribute The Accumulated profit of Rs. 1 Crores From 25 Crores.(Capital Account.
Then also Wheather it is Exempt in Hands of members or it’s a Partition of HUF & Hence Taxable in Hands of Members.
26 July 2010
i just concise my question......
that wheather acumulated profit given by HUF to its members is also exempt u/s 10(2) in hands of members.same as of current year profit.
that wheather acumulated profit given by HUF to its members is also exempt u/s 10(2) in hands of members.same as of current year profit.
01 August 2010
Any sum paid out of the income of HUF to its member is exempt. Income may be of current year or earlier years. If you can show that the amount distributed to its member is out of income of HUF that is sufficient to claim exemption u/s 10(2)
In CIT v Laxmi Dyeing and Finishing Factory
164ITR789(P&H) it has been stated by the Honble' High Court that " mere division of income without the physical division of the property producing the income shall not be deemed to be partition.
In CIT v Laxmi Dyeing and Finishing Factory
164ITR789(P&H) it has been stated by the Honble' High Court that " mere division of income without the physical division of the property producing the income shall not be deemed to be partition.
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