reciept of gift as corpus from other than family.

[Guest]

Sir,

                     My huf has recived gift from my father's friend HUF which became corpus of our huf. now AO is denying the validity of huf  on the basis that huf can be formed by a gift recived from ancestral immovable property. Kindly suggest and from where i can find case laws in support. AO has passed his order and income of huf has been clubbed with that of my father.

[Deepak Nagori]

Dear Shailesh,

The IT Act does not define HUF nor does it state how HUF can be formed. In your case, since the HUF received gift from non relatives (who are not family members), it shall be liable to tax in the hands of HUF. The Rajkot ITAT has held HUF to be a group of relatives in Vineet kumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot)

Regards

CA Deepak Nagori

AI Summary

Hindu Undivided Family status: receipt of gift from non-family does not automatically negate separate HUF tax assessment. Whether a Hindu Undivided Family remains a separate taxable entity when it receives gift corpus from non-family: the Income Tax Act contains no statutory definition of HUF or prescribed mode of formation, and receipt of corpus from non-relatives does not automatically deprive an HUF of separate tax status; tribunal authority treats HUF as a group of relatives and supports assessment in HUF's hands rather than automatic clubbing with a member.