Hindu undivided family(HUF) - Definition / Legal Terminology - Income Tax

Meaning of Hindu undivided family(HUF) The expression 'Hindu undivided family' in the Income-tax Act is used in the sense in which a Hindu joint family is understood under the various schools of Hindu law. In C. Krishna Prasad v. CIT [1974 (11) TMI 2 - SUPREME COURT] While dealing with the Indian Income-tax Act of 1922, the Supreme Court has observed in Surjit Lal Chhabda v. CIT [ 1975 (10) TMI 1 - SUPREME COURT] that joint family and undivided family are synonymous terms and that the expression Hindu undivided family has a well-known connotation under the Hindu law and must be construed in the sense in which it is understood under the Hindu law. It is true that the appellant (before the Supreme Court) cannot constitute a coparcenary with his wife and unmarried daughter but under the Income-tax Act, a Hindu undivided family, not a coparcenary, is a taxable unit. A Hindu coparcenary is a much narrower body than the joint family. It includes only those persons who acquire by birth an interest in the joint or coparcenary property and these are the sons, grandsons and great grandsons of the holder of the joint property for the time being, that is to say, the three generations next to the holder in unbroken male descent. Since, under the Mitakshara law, the right to joint family property by birth is vested in the male issue only, females who come in only as heirs to obstructed heritage (sapratibandhadaya), cannot be coparceneRs. Outside the limits of coparcenary, there is a fringe of persons, males and females, who constitute an undivided or joint family. There is no limit to the number of persons who can compose it nor to their remoteness from the common ancestor and to their relationship with one another. A joint Hindu family consists of persons lineally descended from a common ancestor and includes their wives and unmarried daughters. The joint Hindu family, with all its incidents, is thus a creature of law and cannot be created by act of parties, except to the extent to which a stranger may be affiliated to the family by adoption.