Full Bench Gives Benefit of 23(2) to HUF

Various High Court decisions denying relief under section 23(2) to partnership firms cannot be invoked to deny relief to a HUF since unlike a firm which is a fictional entity and cannot physically reside and so cannot claim benefit of provision, HUF cannot be held to be a fictional entity.

A HUF is nothing but a group of individuals related to each other by blood relations, or in a certain manner. A HUF can be seen being a family of a group of natural persons; there is no dispute that said family can reside in house, which belongs to a HUF. Therefore, there is nothing, in section 23(2), which excludes application of such provision to HUF, which is a group of individuals related to each other - CIT v. HARIPRASAD BHOJNAGARWALA [2012] 20 taxmann.com 316 (Gujarat)