TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Inherited properties not deemed Hindu Undivided Family () despite tax filings. Tribunal ruling overturned.</h1> The court concluded that the properties inherited by the heirs remained individual properties and were not transformed into Hindu Undivided Family (HUF) ... - Issues Involved:1. Devolution of properties under the Hindu Succession Act, 1956.2. Status of the assessee as a Hindu Undivided Family (HUF).3. Validity of returns filed under a mistaken belief of law.4. Legal requirements for blending individual property into HUF property.5. Role of a widow in constituting HUF property.Detailed Analysis:1. Devolution of Properties under the Hindu Succession Act, 1956:The court noted that the properties of G. S. Atwal, who died intestate in 1961, devolved on his legal heirs individually under Section 8 of the Hindu Succession Act, 1956. The heirs inherited the properties as tenants-in-common and not as joint tenants. This devolution was not disputed by the Revenue.2. Status of the Assessee as a Hindu Undivided Family (HUF):The assessee filed returns for the assessment years 1961-62 to 1969-70 in the status of a HUF. The Tribunal held that the filing of returns in this status prima facie indicated the intention to constitute a HUF. However, the court found that the mere filing of returns and signing declarations therein did not conclusively establish the formation of a HUF. The court emphasized that the properties inherited by the heirs were individual properties and not automatically HUF properties.3. Validity of Returns Filed Under a Mistaken Belief of Law:The assessee contended that the returns were filed under a mistaken belief of law. The Tribunal, however, held that there was no evidence to show that the returns were filed under such a mistaken belief. The court noted that the filing of returns over a long period could indicate an intention to form a HUF, but this alone was insufficient to legally constitute a HUF.4. Legal Requirements for Blending Individual Property into HUF Property:The court referred to several precedents to establish that individual property could only be impressed with the character of HUF property through a clear and unequivocal act of blending. This act must be voluntary and intentional. For immovable properties, a registered deed was necessary to effect such a transfer. The court found no evidence of such an act by the heirs, particularly the widow, who could not blend her share into HUF property merely by declaration.5. Role of a Widow in Constituting HUF Property:The court held that a widow, as a female member, could not blend her separate property into HUF property by mere declaration. A valid gift, particularly for immovable properties, required a registered deed. The court distinguished this case from Pushpa Devi v. CIT, where the properties involved were movable and did not require a registered deed for transfer.Conclusion:The court concluded that the properties inherited by the heirs of G. S. Atwal remained individual properties and were not transformed into HUF properties. The filing of returns in the status of a HUF constituted evidence of an intention but did not legally establish a HUF. The Tribunal's finding that the heirs had constituted a HUF was not justified. The questions referred were answered in the negative, and each party was directed to bear its own costs.
TaxTMI 
TaxTMI 
