Hell sir,
Can HUF become partner in partnership firm with the same rights and responsibilities as a individual become partner?
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HUF can be a partner in Firm?
Replies (3)
HUF can't become a partner in a partnership firm. As individuals only can enter into the partnership.
The Hon’ble Supreme Court in Ram Laxman Sugar Mills vs. CIT [1967] 66 ITR 613 observed that a HUF is undoubtedly a Person with in the meaning of section 2(31), it is however not a juristic person for all purposes and cannot enter in to an agreement of partnership either with another HUF or Individual.
An HUF can become a partner in a firm through its Karta. Salary to HUF as a partner shall be taxable in the hands of Karta. Interest on capital shall be taxable in the hands of HUF.
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