Source of purchase money determines HUF character of property, and later book entries do not alter that status.

Coffee estate purchased in the names of an assessee and his brother was treated as Hindu undivided family property because the decisive test was the source of the purchase money. A part of the advance came from amounts payable to the assessee on a prior partition of ancestral property, and property acquired with ancestral or joint family funds retains the character of joint family property even if other contributions are also made. A later debit entry in the books did not alter that character after acquisition. On that basis, the estate belonged to the HUF and the income from it was assessable as HUF income.

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Issues: Whether the coffee estate purchased in the names of the assessee and his brother was the property of the Hindu undivided family or their separate property, and whether the income from the estate was assessable in the hands of the Hindu undivided family.

Analysis: The decisive test was the source of the purchase money. A part of the advance for the purchase was met out of amounts payable to the assessee under a prior partition of ancestral property. Property acquired with funds drawn from ancestral or joint family assets takes the character of joint family property, and the extent of other contribution does not alter that character. The later debit entry in the books could not change the character of the property once acquired. As the assessee had married and the family came into existence thereafter, the property acquired with partition funds became HUF property on the family coming into existence.

Conclusion: The estate was held to belong to the assessee HUF and the income therefrom was assessable as HUF income. The assessee's contention failed and the Revenue succeeded.

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