There's been many a discussion here about shooting Surplus through a Handi. If you do a search on Mil.Surplus you will get a lot of hits and should answer all your questions. Though the search feature has been down as of late, seeing Matt having his hands full with more important things.
Anyway it boils down to some shoot it and others don't. Kinda like "Enter at own risk". Pressures are a little different, and there are a lot of varing quality surplus out there. With some being loaded WAY to hot, and others mild. I'll admit, I have shot Surplus through my -06, but it didn't like it at all. Hard primers make for ignition issues. And it's not all that accurate. In my 223 I have used quite a lot of cheap Wolf for light hearted plinking with different degrees of accuracy. It's not very consistant, and it's VERY dirty. But fun to plink around and shoot off hand practice.
All in all if your wanting a rifle to shoot Surplus ammo in, just pick up a Mosin Nagant, Mauser, or SKS.
Cheaper than a Handi, and even cheaper to shoot. Thought the scope issue is yours to figure out, unless you favor open sights. There's a lot of fun to be had with old surplus rifles.
-Aaron
