Gift of HUF Property to Stranger or to any Person who is a Alien to HUF

 

There are restrictions on Gift of Property belonging to HUF to strangers or to any person who is alien to HUF.

  1. The Hon’ble Supreme Court in the case of Guramma vs Mallappa reported at AIR 1964 SC 510 held as follows : -

 “No authority has so far been placed before us to sustain a gift to a stranger even on the ground of charity. It must be remembered that the manager has no absolute power of disposal over the HUF property. The Hindu law permits him to do so only within such limits. We cannot extend the scope of power on the basis of the wide interpretation given to the word pious purpose in Hindu Law in a different context. In the circumstances, we hold that the gift to stranger of a Joint family property by rhanager is void.

 

2.         In the case of Mukund Singh vs Wazir Singh, (1972) 4 SCC 178, at page 180 the Apex Court was considering the validity of a gift made by a father to a stranger out of the coparcenary property wherein the coparcenary consisted of father and his adopted son and the Apex Court after detailed reasoning held that A gift Of coparcener’s property by a member is void. There is nothing in Section 13 of the Hindu Adoptions and Maintenance Act, 1956 which detracts from that rule.


Thus, gift by HUF to strangers is void. Interestingly the Rajasthan High Court in the case of Commissioner of Income-tax vs Dwarka Dass and Sons(1995) 212 ITR 579 held cash gift of reasonable amount(Rs.5000/-) out of HUF Property to strangers as valid. Thus it has been seen that even though gifts have been held to be void by various courts of law, it is not uncommon to find gifts by HUF. In such cases, precaution must be taken to ensure that the gift to members/strangers by HUF are not termed as Partial Partition within the meaning of Section 171 of the Income-tax Act,1961 as discussed in later chapters.

MORE TOPICS ....

HUF -  Capital Gain Account
HUF -  Deduction from HUF Business Income
Income Derived From Funds Of HUF -Whether Individual Income Or Family Income
Gift by HUF to its Member
Gift To Minor Daughters Out Of HUF Property Prior To Marriage
Gift of HUF Property to Stranger or to any Person who is a Alien to HUF
Clubbing Provisions In Case Of Gifts Received By HUF
Applicability of Clubbing Provisions in case Karta of a HUF is a Partner in a Firm
Gifts received by HUF from Aliens / Strangers
HUF - Investment Options
Concept of Multiple HUF’s
Whether a Single Member can Constitute a HUF ?
Whether any Limit is placed on Number of Members of a HUF ?
Whether HUF- Can Be Constituted with only Female Members ?
Drawings / Expenses of HUF
Whether HUF can be a Shareholder / Subscriber to the MOA ( Memorandum Of Association)  of a Company
Whether HUF can be a Member of a Cooperative Society ?
Whether HUF can be a Partner ?
Can KARTA of a HUF enter into Partnership with another Member of HUF ?
Can There Be A Partnership Between Two HUFs?
Effect Of Death Of Karta In Case Of Partnership Firm
Whether HUF Can Be A Proprietor ?
Whether HUF Can Be A Trustee / Settler ?
HUF - Aliyasantana Law
HUF - Marumakkattayam Law
Power of KARTA in relation to HUF
Managing Members in relation to HUF
Whether a Female can become a Karta ?
Tax Planning TIPS for HUF
HUF - Meaning Of Important Term- “Ancestral”
HUF - Meaning Of Important Term- “Stridhan”
HUF - Meaning Of Important Term- “Mitakshara”
HUF - Meaning Of Important Term- “ Dayabhaga”
Meaning of the term ‘Coparcener’ of HUF
Power of ‘Coparcener’ of HUF
Difference between a ‘Coparcener’ and a ‘Member’
Whether Husband / Wife Can Constitute A HUF ?
HUF - RECOVERY PROVISIONS
‘Maintenance of Accounts’ by HUF
‘Audit of Accounts’ by HUF
Applicability Of The ‘Accounting Standards’ On HUF
Whether Merger Of Two HUF is Possible ?
Residential Status of the HUF under I.T. Act.1956
‘Coparcener Property’ under HUF
 
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