Hindu Undivided Family (HUF) :
Definition of ‘person’ includes HUF.
HUF is not ‘body corporate’.
HUF is a unit consisting of common ancestor and his male lineal descendent of any generation and also wife or wives or unmarried daughters of the said common ancestor.
However, whenever marriage takes place amongst Hindus, Jains or Sikhs, a family is automatically constituted as comprising of husband and the wife. Such a family remains as HUF until divided.
Both son and daughter are ‘Coparceners’ of HUF. Daughter can continue as member and coparcener of HUF even after marriage.
HUF comes into existence automatically on the marriage of the Hindu male. HUF is a creature of law. It cannot be created by acts of any party except that by adoption or marriage, a stranger may become part thereof. Thus, there is no question of ‘forming’ an HUF. Possession of property or a nucleus of property is not necessary for formation of HUF. – SmtSathyaprema Gowda v. CED (1997) 92 617 (SC).
HUF is considered to be a separate entity under Income Tax Act. – K V Kuppa Raju v. GOI (2002) 123 926 (Kar HC DB).
Since HUF is a separate legal entity for purpose of income tax, property of individual member of HUF cannot be attached for recovery of dues of HUF – Kapurchand Shrimal v. TRO AIR 1969 SC 682- followed in State of Gujarat v. Jwelly Tea Co (2016) 54 GST 148 = 66 42 (Guj HC DB).
However, HUF is not a ‘body corporate’.
Karta and coparceners – In HUF, the senior most person is called ‘Karta’ and other male members are ‘coparceners’. A karta can draw salary from HUF for services rendered by him in running the business of HUF.