Ancestral funds can make purchased property HUF property, and later book entries do not alter that character.

Property acquired with the aid of ancestral or joint family funds takes the character of Hindu undivided family property, even if the purchase is made in the name of a member. Here, part of the coffee estate was financed with amounts drawn from the assessee's earlier family partition share, so the estate was treated as HUF property. The later debit entry in the family books did not change the character already attached at acquisition. The income from the estate was therefore assessable in the hands of the assessee-HUF.

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Issues: Whether the coffee estate purchased by the assessee and his brother was joint family property of the Hindu undivided family or the individual property of the assessee, and whether the income from the estate was assessable as the income of the Hindu undivided family.

Analysis: The purchase was financed in part by Rs. 50,000 drawn from amounts due to the assessee under an earlier partition of the family assets. Property acquired with the aid of ancestral or joint family funds assumes the character of joint family property. The subsequent debiting of the amount in the family books did not alter the character already attached to the estate when it was acquired with such aid.

Conclusion: The estate was rightly treated as belonging to the Hindu undivided family, and the income therefrom was assessable in the hands of the assessee-HUF.

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