C A Deepak S Pamecha (CA) (58 Points)
16 February 2014Can karta of huf be the parter in a partnership firm
if yes, partnership deed would conatin what name ( just name of karta or name with designation as karta of huf )
in short what changes are required in a partnership deed.
and the partners remunaration would be charged under huf hand or in individual capacity.
@*CS Siddharth Bumb. *
(B.Com, CA Final, CS )
(5270 Points)
Replied 16 February 2014
Deepak Gupta
(CA Student)
(15922 Points)
Replied 17 February 2014
| Originally posted by : C A Deepak jain | ||
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Can karta of huf be the parter in a partnership firm if yes, partnership deed would conatin what name ( just name of karta or name with designation as karta of huf) in short what changes are required in a partnership deed. and the partners remunaration would be charged under huf hand or in individual capacity. |
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Under sec. 2(31) of the IT Act, 1961, a HUF is a ‘person’ for the purpose of the Income-tax Act. However, a HUF is not a juristic person for all purposes (viz., for the purposes of other laws) including the partnership law. Accordingly, under the Indian Partnership Act, 1932, a HUF is not a juristic person and it cannot enter into a valid partnership with any other person.
.
- Agarwal & Co. v. CIT [1970] 77 ITR 10 (SC).
The karta of the HUF may enter into partnership with outsiders on behalf and for the benefit of his joint family. If he does so the other members of the HUF do not, vis-a-vis the outsiders, become partners in the firm. They cannot interfere in the management of the firm or claim any account of the partnership business or exercise any of the rights of a partner. So far as the outsiders are concerned, it is the karta who alone is, and is in law, recognised as the partner.
.
- CIT v. Seth Govindram Sugar Mills [1965] 57 ITR 510 (SC).
The party name can be written as:
.
M/s XYZ (HUF Name) represented by its Karta Mr. A (Name), son of …… (Father’s Name), residing at……(Address).
If a karta of a HUF is a partner in a firm and where the share of that partner, including remuneration if any, received by him is due to the investments of the family funds, both the share of profits and the remuneration will be assessed as income of the HUF.
(The general doctrine of Hindu Law is that property acquired by a karta with the aid of joint family is impressed with the character of joint family property.)
.
On the other hand, if the remuneration paid to such karta is linked to some professional expertise that he may possess and specifically rendered by him to the firm without any detriment to the funds invested by the HUF in the firm, then the remuneration will be assessed in his individual hands as his individual income. However, even in such cases, the share of profits in their firm will continue to be assessed as income of the HUF.
Rajesh M Patel
(CA Student)
(54 Points)
Replied 18 February 2014
is ther any case law relating to this
thanks
Prashant Shahabadkar
(ASP)
(21 Points)
Replied 05 July 2014
In Indian Partnership Act whether coparcenaries of HUF and Karta of Same HUF can become Partners ?
sanjeev khandelwal
(Tax Consultant)
(131 Points)
Replied 22 December 2015
| Originally posted by : :|)eep @ k Gupt/\ | ||
 |
Originally posted by : C A Deepak jain Can karta of huf be the parter in a partnership firm if yes, partnership deed would conatin what name ( just name of karta or name with designation as karta of huf) in short what changes are required in a partnership deed. and the partners remunaration would be charged under huf hand or in individual capacity. Under sec. 2(31) of the IT Act, 1961, a HUF is a ‘person’ for the purpose of the Income-tax Act. However, a HUF is not a juristic person for all purposes (viz., for the purposes of other laws) including the partnership law. Accordingly, under the Indian Partnership Act, 1932, a HUF is not a juristic person and it cannot enter into a valid partnership with any other person. . - Agarwal & Co. v. CIT [1970] 77 ITR 10 (SC). The karta of the HUF may enter into partnership with outsiders on behalf and for the benefit of his joint family. If he does so the other members of the HUF do not, vis-a-vis the outsiders, become partners in the firm. They cannot interfere in the management of the firm or claim any account of the partnership business or exercise any of the rights of a partner. So far as the outsiders are concerned, it is the karta who alone is, and is in law, recognised as the partner. . - CIT v. Seth Govindram Sugar Mills [1965] 57 ITR 510 (SC). The party name can be written as: . M/s XYZ (HUF Name) represented by its Karta Mr. A (Name), son of …… (Father’s Name), residing at……(Address). If a karta of a HUF is a partner in a firm and where the share of that partner, including remuneration if any, received by him is due to the investments of the family funds, both the share of profits and the remuneration will be assessed as income of the HUF. (The general doctrine of Hindu Law is that property acquired by a karta with the aid of joint family is impressed with the character of joint family property.) . On the other hand, if the remuneration paid to such karta is linked to some professional expertise that he may possess and specifically rendered by him to the firm without any detriment to the funds invested by the HUF in the firm, then the remuneration will be assessed in his individual hands as his individual income. However, even in such cases, the share of profits in their firm will continue to be assessed as income of the HUF. |
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sanjeev khandelwal
(Tax Consultant)
(131 Points)
Replied 23 December 2015
In Parnership firm if HUF are Partner and Karta will die what Next ?
Can Another member of HUF treated as partner ?
COZ HUF can not die only partition are possible in HUF
as per ITax act it is alllow coz Itax take HUF as a person but under Indian Partnership Act its not possible its enter as a partner with individual capacity and if such Karta will die
can status of Partner (HUF ) automatically end or New Karta of HUF become New Partner
please say alongwith procedure ?
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