Property in individual name can be treated as of huf

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Ravindra Manek (Querist)
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14 October 2011 Dear all,

Mr. A has sold a land. However he has inherited this land from his father. His father has inherited this land from his father (i.e., grandfather of Mr. A).

Now, this land has been sold by Mr. A to a company. In the sale deed name of Mr. A is described as seller. In land revenue records also, his name is shown as owner.

Now, in this situation, can it be treated as land belonging to HUF of Mr. A as he has not procured this land on his own but this was the ancestral land inherited by him?

Main argument for treating this land as of his HUF is that children of Mr. A can also claim their right in this land (or its proceeds) as per Hindu Law, if I am not wrong.

Kindly clarify this matter. Any legal provisions or case law will be of great help.

Thanks in advance.

Regards
CA Ravindra R. Manek

Maninder Jain

Maninder Jain (Expert)
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15 October 2011 Actually a HUF is created at the time of birth of a child of a couple & its assets are created when some relative gifts some proeperty to the HUF plus the income earned from the gifted assets.

In your case, Mr A's father inherited (by virtue of hindu laws of inheritence) from A's grandfather. In same manner A inherited from his father.

Inheritence requires death of somebody but gift requires the person out of his sane mind gift some property.

So in my opinion, your tax planning (??) may not suit the tax officer

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