Published Paper Details:

There are only two principal sources either a gift by paternal ancestor or a share in partition, the property will be considered as HUF property of the individual. The Supreme Court restricted the source and prohibited the tax planning of an individual who inherited the property from father treating it as HUF property, Even for HUF, the taxing authority has to examine the residential status. The source of HUF property and the nature and right of individual coparcener in relation of HUF property, There is a basic distinction between Mitakshara and Daya Bhag regarding HUF property because in Daya Bhag son does not have birth right in the property during the life time of the father. Only after the death of the father brother's can consider the property as HUF property till they remain joint and can be assessed as HUF whereas in Mitakshara ancestor property from paternal side automatically takes shape of HUF property and every coparcener has fluctuating interest in the property under the concept of common ownership and unit of possession. From time to time the taxing authorities restricted the source of HUF property and prohibited blending of individual property in common pool of HUF even then in hundreds of cases HUF property has been separately assessed. If a coparcener transfers his individual property in the common pool, the property would become HUF property but the income from that property will be treated as individual income.