HUF ENTITLED TO CLAIM BENEFIT OF SELF-OCCUPATION OF HOUSE PROPERTY UNDER SECTION 23(2)

HUF is a family comprising of group of natural persons. It is a family that consists of all persons lineally descended from a common ancestor, including wives and unmarried daughters. Therefore HUF can claim benefit of self occupation of House property under section 23(2).

The Assessee being a HUF claimed the benefit of self-occupation of a House Property u/s. 23(2). However the Assessing Officer did not accept the claim and denied the benefit of self occupation of house property to HUF arguing that such benefit is available only to an individual who is a natural person and not to an imaginary person i.e. HUF or firm etc.

The High Court in CIT v. HARIPRASAD BHOJNAGARWALA (2012) 342 ITR 69 (GUJ.) has held that a firm cannot physically reside in a House Property and therefore a firm cannot claim the benefit of this provision, which is available to an assessable entity who can actually occupy the House. However, HUF is a group of individuals related to each other. The said family can reside in the House, which belongs to HUF. Since a HUF cannot consist of artificial persons, it cannot said to be a fictional entity.

Therefore the Court held that the HUF is entitled to claim benefit of self-occupation of House Property under section 23(2).

This Article has been Shared by Student of ICAI Palak Aggarwal. She Can be reached at aggarwal.palak2809@gmail.com

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