HUF character requires proof: inherited business remained taxable in individual capacity absent evidence of ancestral origin.

Property or business inherited from a father is assessable in the heir's individual capacity unless it is shown to be ancestral or otherwise impressed with Hindu Undivided Family character. The Tribunal found no evidence that the money-lending business was ancestral in the father's hands, and held that mere continuation of the business by family members after his death did not convert the assets into HUF property under the Hindu Succession Act. Earlier acceptance of HUF status, made without proper enquiry, was not enough to establish the claim for the relevant years. Assessment in the individual status was upheld.

---

---

Issues: Whether the assessee had established that the business and funds in question belonged to a Hindu Undivided Family, or whether the income and assets were rightly assessable in the assessee's individual capacity.

Analysis: The assessee relied on earlier assessments made in the status of HUF and on the claim that the business originated with the father and continued through the mother. The Tribunal found, however, that the business in the father's hands had not been shown to be ancestral, and in the absence of evidence it had to be treated as his individual business. On the father's death, the property and business devolved under the Hindu Succession Act, and there was no material to show that the assets became HUF property merely because they were later carried on by family members. The Tribunal also held that the earlier acceptance of HUF status, made without proper enquiry, did not by itself establish the assessee's claim for the relevant years.

Conclusion: The assessee failed to prove HUF status in relation to the money-lending business and funds; assessment in the individual status was upheld.

Final Conclusion: The appeals were rejected and the orders of the lower authorities were affirmed.

Ratio Decidendi: Property or business inherited from a father will be assessable in the heir's individual capacity unless it is shown to be ancestral or otherwise impressed with HUF character.

---