Ken & Yare Advisory Solution Private Limited

We take pride in our team of dedicated and proficient workforce that works as a cohesive whole and in close collaboration adhering to the demands and requirements of our clients. They help us in moving at par with excellence and provide excellent counseling to the clients owing to the judicious aegis of our CEO Mr. Lalit Khurana, who is CA and MBA in Finance. With the vision of being a global corporate leader in professional audit, tax regulatory and financial services he start this venture by the name of Ken & Yare. Our team comprises of:

• Financial consultants
• Chartered Accountants
• Lawyers
• Auditors
• Professional managers

The entire team has profound knowledge, expertise, strong academic and analytical skills in this realm. With excellent interpersonal, communication skills and desired commercial exposure they successfully meet the queries and specifications of our esteemed clients. And following are the details of our offices which is located in India and outside India :- In India Lalit Khurana Mob: 9811504102 B-471/A , Budh Nagar Inderpuri New Delhi-110012 Dharmendra Kumar Mob: 9818533161 18-D , Deep Enclave Ashok Vihar Phase -III New Delhi In Gulf Jai Prakash Garg Mob : +965-94475229 US Address Sujeet Kumar Mob: 4847448901 F102 Audubon Courts Apt 2828 Egypt rd Norristown. PA 19403 UK Address Mob: - 00447596758082 Abhishek kumar 2R , 285 Hawkhill DUNDEE Scotland (UK)

Q-1: What is HUF?
Ans: HUF includes those persons who acquired by birth an interest in joint family property.

Q-2: Does HUF include the wives and daughters of the abovesaid persons?
Ans: Yes. A family consists of all persons lineally descended from a common ancestor and include their wives and unmarried daughters.

Q-3: Does HUF arise from a contract?
Ans: No HUF arises only from status.

Q-4: Who is a coparcener?
Ans: The persons who acquire by birth and interest in joint family property. The test of Coparcener is that coparcener enjoys right to enforce partition.

Q-5: What are the schools of law under HUF.
Ans: Daaya bhaga: It prevails only in west Bengal & Assam. Here a son acquires right in the family property not on his birth but on the death of his father.
Mitaaakshara: Under the school of law each son by birth acquires an equal interest with his father in the ancestral property. This law prevalent all over India.

Q-6: Can female members can enforce partition?
Ans: Female members do not enjoy right to enforce partition, through they are entitled to maintenance out of the family property.

Q-7: What is ancestral property?
Ans: It is the property, which a man inherits from any of his three immediate male ancestors , i.e., father , grand father and great grand father.

Q-8: Should there be two male members?
Ans: There need not be necessarily more than one male member to form a HUF along with female members.

Q-9: Will a joint undivided family be assessed as HUF?
Ans: Yes. CIT v. Smt. Champa Kumari Singhi(1972)83 ITR 293(SC).

Q-10: Is there HUF in Kerala??
Ans : No.

Q-11: What is a smaller HUF?
Ans : A son can have smaller HUF with his wife and children, while he continues to be a member of his father's HUF. In his father's HUF, he is mere a member, and his own, he is a karta.

Q-12: How does HUF concept deal with females?
Ans: a)Women members are not treated as comparcener of HUF.
b)A daughter after her marriage has no right at all in assets of HUF.
c)After the death of karta, if there is no male member, the wife of karta not becomes a karta.
d)If a Karta dies, leaving behind his window and minor son, even then, wife is not permitted to become a karta.

Q-13: Can there be HUF with only female members?
Ans : Yes. As so long as the property which was originally of the joint Hindu family remains in the hands of the windows of the member of the family and is not divided, HUF can continue with female members.

Q-14: When will HUF status be recognize under Income -Tax Act?
Ans : a)There should be a coparcener.
b)There should be a joint family property which consists of ancestral property, property acquired with the aid of ancestral property and property transferred by its members.

Q-15: What happens on the death of a sole male member?
Ans : Even after death, so long as the property which was originally of HUF remains in the hands of widows and is not divided among them, the joint family continues.

Q-16: Can individual members be assessed in respect of HUF'S Income?
Ans : So long as HUF exist, individual members can not be separately assessed in respect of HUF'S income. ITO v. Bachu Lal Kapoor (1966) 60 ITR 74 (SC).

Q-17: Can Karta gift HUF property?
Ans : Gift by karta of HUF, a movable property or an immovable property within reasonable limits in favor of his daughter is permissible on the occasion of her marriage.

Q-18: Is oral partition among HUF permissible?
Ans : Yes Hans Raj Agarwal (2003) 259 ITR 265/126 Taxman 603 (SC).

Q-19: Can the ITO enquire about details of partition?
Ans : Yes it is his duty to know the exact portions of the division among the members and to hold an inquiry into the claim. Lakmichand Bajinath v. CIT (1959) 35 ITR 416 (SC).

Q-20: Should the partition be recorded by ITO?
Ans : The partition is not valid and the HUF is assessable to the tax as such, unless the finding is recorded by the AO by an order under section 171 Addl CIT v. Maharani Raj Laxmi Devi (1997)224 ITR 582/91 Taxman 20 (SC).

Q-21: Assesses go certain property from HUF but has no son. What is the status?
Ans : Where the assesses having life, but no child got certain property on partition of bigger HUF, it was held that assessee's claim for HUF status (smaller HUF) was valid. CIT Krishna kumar (1982) 10 Taxman 292 (MP).

Q-22: What happens when a single coparcener with no male issue acquire HUF property?
Ans : The property will belong to him as his separate property and he could validly gift it to his wife and daughters. CIT v. Admiralty Flats Motel (1982) 133 ITR 895 (MAD)

Q-23: What happens when karta is a partner in a partnership firm gets salary?
Ans : Unless the remuneration has direct nexus with investment of funds of the family, it will be Treated as personal income of katra. Laxman Das v. CIT (1982) 138 ITR 628/(1983) 12 Taxman 58 (all).

Q-24: What happens when a member who is a partner in a firm gets a salary?
Ans : It is his individual income. Unless it is the part of the return on investment of HUF. CIT v. Trilok Nath Mahrotra (1998) 98 Taxman 462 (SC).

Q-25: What happens when assesse's father settled his self-acquired property in favour of assessee with some condition?
Ans : The property is assessable as individual property of assessee even though is subsequent partition of HUF such property is treated as HUF property. CIT v. CG. Venkatasubben (1999) 150 Taxman 352 (Mad).

Q-26: What happens when a single coparcener with no male issue acquire HUF property?Can a HUF pay salary to karta for looking after his affairs?
Ans: Yes. Provided it is genuine and not excessive and under a valid bona fied agreement . Jugal Kishore Baleo v. CIT (1967) 63 ITR 238 (SC).

Q-27: Can a HUF pay salary to karta for looking after its interest in a firm?
Ans : Yes, CIT v. Prakash chand Agarwal (1982) 11 Taxman 55 (MP)

Q-28: Who can claim share in partition?
Ans : a)All coparceners.
b)A son in the womb of his mother at the time of partition
c)Mother.
d)Wife.

Q-29: Will section 171 have application on a Hindu family not assessed as HUF so far?
Ans : No. CIT v. Kantilal Ambalal (1991) 59 Taxman 232 (Guj)

Q-30: Can partial partition take place in HUF?
Ans : Partial partition is not recognized under Income tax Act as per section 171(9).

Q-31: Can a HUF become a partner in a firm?
Ans : No it can do so only through its katra. CIT v. Seth Govindram sugar Mills (1965) 57 ITR 510 (SC).

Q-32: Can a widow be a katra of joint family?
Ans : As the widow is not coparcener, she has no legal qualification to become a katra. CIT v. Seth Govindram Sugar Mills (1965) 57 ITR 510 (SC)

Q-33: Can female member blend her property with that HUF?
Ans : The right of blending is limited to coparcener. Pushpa Devi V. cit (1997) 109itr 730 (sc)

Q-34: X has obtained property on partition of HUF. He has daughter but no son. Can the property treated as HUF property?
Ans : Yes. There is no requirement like that, in HUF, there must be at least two male members. N.V.Narendranath v. CWT (1969) 74 ITR 190 (SC).

Q-35: With the gift received from the joint family property can a member from his own HUF?
Ans : No a gift cannot help in forming or creating a HUF. It may only provide the nucleus of the Properties to an already existing HUF, Which may not be having any joint Family property Or fund.

Q-51 : What are the statutory basis for foreign investment in India?
Ans : The foreign investment in India is governed by the provisions of Foreign
Exchange Management (Transfer or Issue of Security by a person resident outside
India) Regulation, 2000. Reserve Bank of India has issued Notification No.
FEMA.20/2000-RB dated 3rd May 2000 as amended from time to time.

Q-53 : What is Automatic Route of foreign investment in India?
Ans : Foreign Direct Investment (FDI) up to 100% ( See Table 30 where sectoral caps are
indicated against each industry) is allowed under the automatic route in all
activities/sectors except the following which require prior approval of the
Government :
a. Activities/items that require an Industrial License;
b. Proposals in which the foreign collaborator has an existing financial/technical collaboration in India in the 'same' field'
c. Proposals for acquisition of shares in an existing Indian company in: Financial services sector and where Securities & Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 is attracted;
d. All proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not permitted.
FDI in sectors/activities to the extent permitted under automatic route does not
require any prior approval either by the Government or RBI. The investors are only
required to notify the Regional office concerned of RBI within 30 days of receipt of
inward remittances and file the required documents with that office within 30 days of
issue-or shares to foreign investors.

Q-54 : Whether any reporting system is to be observed after investments?
Ans : Yes: A two-stage reporting procedure has been introduced for this purpose. On
receipt of money for investment: Within 30 days of receipt of money from the foreign
investor, the Indian company will report to the Regional Office of RBI under whose
jurisdiction its Registered Office is located, a report containing details such as: Name and address of the foreign investors Date of receipt of funds and their rupee equivalent Name and address of the authorised dealer through whom the funds have
been received, and Details of the Government approval, if any; On issue of shares to
foreign investor: Within 30 days from the date of issue of shares, a report in Form
FC-GPR together with the following documents should be filed with the Regional
Office of RBI: Certificate from the Company Secretary of the company accepting
investment from persons resident outside India certifying that All the requirements
of the Companies Act, 1956 have been complied with; Terms and conditions of the
Government approval, if any, have been complied with.

Q-55 : What are the guidelines for transfer of existing shares from residents to non-residents or non-residents to residents?
Ans : Reserve Bank has given general permission to transfer the shares [Please refer details of the scheme in A.P.(DIR Series) Circular No.16 dated 4th October, 2004].

Q-56 : Can a foreign investor puts his money in an unlisted shares issued by a company in India?
Ans : As per the regulations/guidelines issued by RBI/Government of India, investment can be made in unlisted shares of Indian companies.

Q-57 : Can a foreigner set up a partnership/proprietorship concern in India?
Ans : No. Only NRIs/PIOs are allowed to set up partnership/proprietorship concern in
India. Even for NRIs/PIOs investment is allowed only on non-repatriation basis.

Q-58 : What should be done, if Automatic Route of RBI for technology transfer is not available?
Ans : Proposals which do not satisfy the parameters prescribed for automatic route of RBI, require clearance from Ministry of Commerce, Department of Industrial Policy and
Promotion, Government of India.

Q-59 : What is the procedure for setting up Branch office?
Ans : Reserve Bank permits companies engaged in manufacturing and trading activities
abroad to set up Branch Offices in India for the following purposes:
a. To represent the parent company/other foreign companies in various matters in India e.g. acting as buying/selling agents in India.
b. To conduct research work in the area in which the parent company is engaged.
c. To undertake export and import activities and trading on wholesale basis.
d. To promote possible technical and financial collaborations between the Indian companies and overseas companies.
e. Rendering professional or consultancy services.
f. Rendering services in Information technology and development of software in India.
g. Rendering technical support to the products supplied by the parent/Group companies.

Q-60 : What is the procedure for opening the Branch/Liaison office in India by a foreign company?
Ans : Foreign company has to obtain the prior permission of Reserve Bank. For this purpose a foreign company should apply in Form FNC.l to the Central Office of Reserve Bank of India located in Mumbai.

Q-61 : Whether permission is also required to open a project office in India.
Ans : No. Reserve Bank has given general permission provided-
a. They have secured from an Indian company;
b. A contract to execute a project in India; and
c. The project is funded directly by inward remittance from abroad; or
d. The project is funded by a bilateral or multilateral International Financing Agency; or
e. The project has been cleared by an appropriate authority; or
f. A company or entity in India awarding the contract has been granted Term

Loan by a Public Financial Institution or a bank in India for the project.
However, if the above criteria are not met, or if the parent entity is established in Pakistan, Bangladesh, Sri Lanka,Afghanistan, Iran or China, such applications have to be forwarded to Central Office of the Foreign Exchange Department of the Reserve Bank of India at Mumbai for approval.

Q-62 : What is the procedure to be followed for obtaining Reserve Bank's approval for opening Liaison Office/Representative Office?
Ans : A Liaison office can carry on only liaison activities, i.e. it can act as a channel of communication between Head Office abroad and parties in India. It is not allowed to undertake any business activity in India and cannot earn any income in India.
Expenses of such offices are to be met entirely through inward remittances of foreign exchange from the Head Office abroad. The role of such offices is, therefore, limited to collecting information about possible market opportunities and providing information about the company and its products to the prospective Indian
customers.

The companies desirous of opening a liaison office in India may make an application
in form FNC-l along with the documents mentioned therein to Foreign Investment
Division, Foreign Exchange Department, Reserve Bank of India, Central Office,
Mumbai.

Permission to set up such offices is initially granted for a period of 3 years and this may be extended from time to time by the Regional Office in whose jurisdiction the office is set up. Liaison/representative offices have to file an Activity Certificate on annual basis from a Chartered Accountant to the-concerned Regional Office of the
RBI, stating that the Liaison Office has undertaken only those activities permitted by
RBI.

Q-36 : Mr. C, an outsider, makes a gift to a HUF consisting of Mr. A and his wife B. Can A&B assessed as a HUF respect of C's gift?
Ans : The HUF should have two or more coparceners to treat Mr. gift as HUF property. Hence In this case it is not possible as A is the only coparcener. (Section 400 of Mulla's Hindu Law)

Q-37: Mr. A is an assessee in the status of HUF. He has sons and daughters, can he do partition among sons?
Ans: The father can effect only a total partition in respect o all the properties. He does not have Right to effect partial partition. CIT v. Seth Gopaldas (HUF) [1979] 116 ITR 577 (MP)

Q-38 :Can a father do total partition without resorting to suit?
Ans: Yes whereas any other coprcener can achieve this result only by a suit CIT v. Seth Gopaldas (HUF) [1979] 116 ITR 577 (MP)

Q-39 : Can a female along with her son represent HUF As karta when father is also alive?
Ans: Only a coparcener can be a manager. Any other senior male member can also manage the affairs. But if the father is incapable and son is minor. Mother may represent the family for Income Tax Assessment Sushiladevi rampuriya v. ITO [1960] 38 ITR 316 (cal.)

Q-40 : Mrs. X along with two daughter after her husband's death, wants to form a HUF. What are the views?
Ans: Not possible. The concept of female forming a joint hindu family agreement appears to be Contrary to hindu law. CIT v. Smt. Sandhya Rani Dutta [2001] 115 Taxman 369(SC)

Q-41 : What is the position of the daughter after her marriage?
Ans: The daughter on her marriage cases to be a member of her father's HUF and becomes a Member of her Husband's HUF.

Q-42. Can a adopter son become a coparcener
Ans: No. birth of male only makes a coparcener. Adopter child can become member.

Q-43. Can HUF be created through will?
Ans: Yes Surjitlal chhabara v. CIT [1967] 63 ITR 416 (SC)

Q-44 : Does section 171 of I.T. Act apply to both schools of law?
Ans: Yes it is applicable to Dayabhaga and Mitakshara school of hindu law. Joint family of Udayan Chinubhai v. CIT[1967] 63 ITR 416 (SC).

Q-45 : How can properties not capable of physical division be partitioned?
Ans: It can be done through Book intries K.G. Ramakrishnirer v. CIT [1963] 49 ITR 608

Q-46 : Can allotment of share to a person not entitled invalidate partition?
Ans: No. CIT v. Govind Narain. [1975] 101 ITR 602 (all).

Q-47 : When can a claim partition be made with ITO?
Ans: It can made before the assessment. Rajmal Paharachand v. CIT [1950] 18 ITR 1 (Punj)

Q-48 : A minor receives share on partition of HUF. What is your advice?
Ans : Till Minority, the income will be clubbed eith his father's in Income is to be offered in his Individual assessment.
After marriage, he can claim status of HUF with himself & wife. He becomes karta. CIT v. Parshottamdas K. Panchal [2002] 257 ITR 96/[2003] 123 Taxman 563 (Guj.)

Q-49 : Can a stranger gift a property to HUF?
Ans: Yes. Provided there is clear declaration that the gift is for the Benefits of HUF. CIT v. Satyendra kumar [1998] 232 ITR 360 (SC).

Q-50 : Mr. A karta dies in Air crash & compensation is received by sons. Is it HUF income?
Ans : Insurance compensation is an individual asset and not that of HUF. The interest on this Deposit amount is not assessable in the hands of HUF but in the hands of sons. L Bansi Dhar & sons v. CIT [1980] 123 ITR 58/4 Taxman 176 (Delhi)