• Father's ancestral business

Hi,
I have been working for my father's business for more than 38 years during which he was not paying me any salary. The money has been received by him from his father on him partionioning from the house in 1976. Today he wants to throw me out of the business. Do I have any claims on the business and it's Investments? The money received by him that time was put in his individual name and not the huf.
Asked 7 years ago in Family Law
Religion: Hindu

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9 Answers

Dear Sir,

You may claim the same by filing suit and block the account and seize the entire business, let him go to the Court to claim his share. It is a purely HUF property and you can easily get a share.

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What is a HUF or Hindu Undivided Family?

A HUF or Hindu Undivided Family (HUF) consists of all person lineally descended from a common ancestor and includes their wives and unmarried daughters. Usually, a joint Hindu family would consist of a male Hindu, his wife and his unmarried daughters. The daughter ceases to be a member of her father’s family on marriage and becomes a member of her husband’s family. However, the existence of a joint estate is not an essential requisite to constitute a joint family. A joint Hindu family or Hindu Undivided Family can also consist of a single male member and widows of deceased male members.

Requirement to Form HUF

A Hindu Undivided Family must consist of atleast two members to constitute a joint family. The existence of estate or property is not an essential requirement to form a Hindu Undivided Family. Under Hindu Law, an HUF is a family which consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. An HUF cannot be created under a contract, it is created automatically in a Hindu Family.

Note: Jain and Sikh families though are not governed by the Hindu Law, can be treated as a HUF for Income Tax purposes.

HUF under Income Tax Act

A HUF is recognized under Income Tax Act as a separate assessable entity if two conditions are satisfied:

There should be a coparcenership.

Coparcenery is joint inheritance or heirship of property. Coparcenership is said to exist in a Hindu Undivided Family if the right to joint enjoyment, the right to call for partitition and the right of survivorship is held in coparcenary.

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.

Ancestral property is any property which a man inherits from any of his three immediate male ancestors, i.e. his father, grandfather and great grandfather. Property inherited from any other relation is not treated as ancestral property.

Finally, it is important to note that once a joint family income is assessed as that of HUF, it continues to be assessed as such in subsequent assessment years till partition is claimed by coparceners.

Benefits of Forming HUF

One of the major benefits of forming a HUF is that a HUF is considered a separate legal entity and is thus eligible to obtain a PAN card and have a bank account opened in the name of the HUF. A HUF can be easily formed and once formed, the “karta”, usually the oldest male head of the family, is provided additional basic tax exemption of Rs. 1.8 lakh per year, along with the benefit of lower tax slabs, i.e, 10% tax on income up to Rs. 5 lakh and 20% up to Rs. 8 lakh.

Kishan Dutt Kalaskar
Advocate, Bangalore
6230 Answers
499 Consultations

1. Your father got his property by getting his father's properties partitioned.

2. he then old his said share of the property or he has got his share when of money the property was sold

3. There is no question of any HUF arising here where he should have put back the said amount.

4. The said amount was his amount and you have no claim on it.

5. You had no agreement with him while working in his business for which you can have no legal claim on him.

6. You are legally in a weak position to claim share of his property or business for which it will be prudent on your part to amicably settle the matter with him in your own interest.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

You have no share in property received by your father on partition from his father property

2) it Is not ancestral property

3) you have no claims in business

Ajay Sethi
Advocate, Mumbai
99793 Answers
8147 Consultations

Firslty, it has never been the pint of discussion before the court as to decide that whether the anscestral money or property has been received by the coparsener.

Secondly, the bussiness is the part of the anscestral property, and you have alright in it irrespective of the fact that whether you have been part of the same or not.

Thirdly, you have always been part of the business and it’s development.

Fourthly, you please file a case for your share in the said bussiness.

Rest, you are free to share anything in future.

Sanjay Baniwal
Advocate, South Delhi
5477 Answers
13 Consultations

1) Yes, its your birth rights in the family ancestral business and you should get your share in the business like how individual get his share in the land property.

2) You can ask for your rights and your share till date about salary and business share.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

The money received by your father from his father shall be treated as his own money and nobody can claim a share in it for whatever reason.

If this is not a HUF run business, you cannot claim any share in the profits or business itself.

You can claim salary fo so many years by issuing a legal notice if he is refusing to give any money to you.

How far it will be maintainable depends on how you convince court about your employment in the business.

T Kalaiselvan
Advocate, Vellore
89995 Answers
2496 Consultations

As per my understanding, you cannot claim any share in the said properties of your father, as those properties are not ancestral properties, as per law as they werereceived by your father on partition from his father property.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

Moreover, in order to claim salaries, you'll have to serve a legal notice to your father forr recovery of salary for so moany years, but in absence of any agreement between you two, it would be difficult to establish your employment in your father's business.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

Dear Client,

On partition, it`s become his personal property. You can claim fruit of 38 years working, but no inheritance right at present.

Yogendra Singh Rajawat
Advocate, Jaipur
23082 Answers
31 Consultations

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