Opinion Of Eminent Legal Luminaries On Controversial Issues

Hindu Succession Act, 1956 -Hindu Undivided family (HUF) -Formation of HUF

QUERY: The HUF ‘s pool is empty. It consists of husband & wife only. Can it be formed with gift from relatives etc.
ANSWER: Yes, in C. Krishna Prasad v. CIT [97 ITR 493], the Supreme Court clarified that family signifies a group plurality of persons is an essential attribute of a family.
So, husband and wife being family nucleus . The Supreme Court in CIT v. Satyendra Kumar [232 ITR 360] affirmed the decision in Satyendra Kumar v. CIT [140 ITR 840 (Mad.)] and held that where female donor had gifted funds with clear intention of benefitting the family as a whole, the gifted property was part of the joint family property and the assessee was liable to be taxed in the status of HUF. This was a case where donor lady who provided the funds made it perfectly clear that those funds were to be utilised only for the benefit of the family. Therefore, the intention of the donor must necessary be spelt out in the gift deed or letter conveying gift.

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