Dear Sirs,
One of my client have been planning to create HUF and to run another business through HUF.
The family members of him are Wife,Son and Daughter. But he had no any ancestral property.
Whether is it possible for creation of HUF ? If possible, which can be formation date ??
Please help me in this situation and clarify my doubts.
yes
HUF can be created by taking gift in the name of HUF. The gift can be taken from father, friends or anyone else.
1) Since the HUF is a creature of Hindu law, it can exist even without any nucleus or ancestral joint family property.
-CIT v. K. Satyendra Kumar (1998) 232 ITR 360 (SC)
.
2) The term ‘joint family property’ or ‘HUF property’ under the Hindu law may also include self-acquired property.
.
3) In case the HUF did not have any ancestral property and the HUF property was created by the sole coparcener throwing his separate property in the common hotchpot, the income from the property would be assessed in his hands as an individual. This is because none other than him had any coparcenary interest in the property.
.
In this case, the property did not come to him either by devolution or by partition but by his own act of throwing the same into the family hotchpot. Therefore though the property assumes the character of HUF property, it could not be held assessable in the hands of the HUF.
- Surjit Lal Chhabda v. CIT (1975) 101 ITR 776 (SC).
.
4) Even though there may be many modes of creation of HUF property available, the methods of gift and will are the most common ways for creating a HUF.
CAclubindia
