Everything above said is TOTALLY WRONG.
- HUF can enter into Contracts.
- Just because the number of Members, Increases/Decreases in the HUF, that doesn’t mean, HUF does not have stability (Note: In case of Companies, No. of Members also Increases/reduces).
The Answer is Yes, Yes and Yes, HUF can become the Partner in the Partnership Firm. Here is the some of the ignored case Laws on the HUF Status.
REPRESENTATIVE OF HUF IN A PARTNERSHIP FIRM:
An HUF can become a partner in a firm. The Karta or a member of the HUF can represent the HUF in a firm. A female member can also represent HUF in a partnership firm, CIT v. Banaik Industries 119 ITR 282 (Pat.)
REMUNERATION TO KARTA OR MEMBER FROM FIRM:
Where remuneration was received by a member of HUF from a firm, where he was partner on behalf of HUF for managing firms business such remuneration was his individual income, CIT v. G. V. Dhakappa 72 ITR 192 (SC); Premnath v. CIT 78 ITR 319 (SC).
However, income received by a member of HUF from a firm or company is taxable as the income of the HUF, if it is earned detriment to or with the aid of family funds, otherwise it is taxable as the separate income of the member, P.N. Krishna v. CIT 73 ITR 539 (SC).
HUF AND FIRM:
Members of HUF can constitute Partnership without effecting a partition or without disturbing the status of joint family. Ratanchand Darbarilal v. CIT 15 ITR 720 (SC).
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