2010 (10) TMI 1060

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....he I.T. Act on the investment made in the name of one of the Member of the HUF, while as the sale of the property was by the Karta of the HUF on whose name the property stood. 3. The assessee-HUF filed its return of income for the A.Y. 2004-05 on 28.12.2004 declaring an income of ₹ 1,61,240. Initially the return was processed u/s. 143(1), however, the case was selected for scrutiny and notice u/s. 143(2) and 142(1) were issued and served. During the course of assessment proceedings, it was observed that the Kartha of the HUF, Shri Ramesh Kumar had sold a property at Gurgaon for ₹ 18 lakhs. Subsequently, another property was purchased at National Games Village, Bangalore in the name of Mrs. Sandhya, W/o Shri Ramesh Kumar, the ka....

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....eet of the appellant-HUF. (3) The rent received from this property has been offered to tax in the name of the appellant-HUF. (4) The property tax has also been paid in the name of the appellant HUF. (5) Smt. Sandhya Kumar, Wife of the Kartha of the HUF is also a member of the HUF on whose name the new asset is purchased. (6) Smt. Sandhya Kumar, is not individually benefited by the purchase of the property to the exclusion of the other members of the HUF. Considering the above facts, ld. CIT(A) arrived at a conclusion that the AO is not legally correct in denying exemption u/s. 54F of the Act by placing reliance on the case law cited above. Ld. CIT(A) further distinguished that the facts of the case in hand is quite different from the f....

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....is that all the members of the HUF collectively own the property of the HUF by holding an equivalent interest. A HUF cannot sue or be sued in the joint family name and cannot convey the property held by it in its joint character. However, for the purpose of Income Tax Act, the Hindu Undivided Family has a separate and distinctive status. Therefore, it is obvious that the property of the HUF stands in the name of the Karta of the HUF or in the name of the members of the HUF. A Karta of the HUF or a member of the HUF can hold a property on behalf of the HUF or in individual capacity as a beneficial owner. In the given case in hand the existence of HUF cannot be disputed. Shri Ramesh Kumar jointly with his wife and children constitute a valid ....