Hindu undivided family capital burden of proof rests on Revenue; mere coparcenary status does not prove family funds.

A coparcener's mere membership of a Hindu undivided family does not create a presumption that capital credited in his name belongs to the family. The Revenue must adduce material evidence to show that the amounts are in truth family funds; the burden does not shift to the assessee merely because the entries appear in the accounts. On the facts stated, no such material was produced, so the Tribunal's approach in casting the onus on the assessee was incorrect and the inclusion of profits attributable to those shares was not sustainable.

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Issues: Whether there was material to hold that the capital standing in the names of M.G. Rungta and B.N. Rungta belonged to the Hindu undivided family, and whether the inclusion of the profits arising from those shares in the assessee's assessment was valid.

Analysis: The accounts showed that the two coparceners had deposited amounts which ultimately reached the business, but membership of a Hindu undivided family by itself created no presumption that monies advanced by individual coparceners came from family funds. The legal burden lay on the Department to establish, by material evidence, that the amounts credited in the names of the two members were in truth family funds. The Tribunal had misdirected itself by placing the onus on the assessee to prove that the amounts came from personal resources. No material had been produced by the Department to discharge the burden resting on it.

Conclusion: There was no material on which the Tribunal could hold that the capital contributed by M.G. Rungta and B.N. Rungta was advanced by the Hindu undivided family, and the inclusion of the related profits in the assessee's assessment was not sustainable.

Ratio Decidendi: Where the Revenue seeks to treat capital standing in the name of a coparcener as family capital, the burden lies on the Revenue to prove that the funds ly belonged to the Hindu undivided family; mere family relationship or entry in the accounts does not create that presumption.

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