Per Shri T. Venkatappa, Judicial Member - The assessee is a doctor. He claimed the status in respect of house property income as HUF. There was a partition on 16-4-1956 between Shri Revana, Gowda, the father and his two sons, P. Nagana Gowda (the assessee) and P. Parameswara Gowda. In this partition, P. Nagana Gowda, the assessee, got 17 acres of dry land and a house valued at Rs. 12,000. Subsequently, the assessee purchased 27 acres of agricultural land in the years 1966-67 to 1968-69 out of his own personal funds. The assessee constructed a hospital building worth Rs. 21 lakhs or so during the assessment years 1970-71 to 1974-75 out of his own personal funds. The assessee claimed that the income from the said hospital building is assessable in the assessment of the HUF and not in the individual assessment. The ITO held that the investment in the said building is out of personal funds of the assessee. the assessee has not produced any evidence to prove that the investment in the hospital building was out of HUF nucleus. The ancestral nucleus is insignificant. The agricultural income was very small ranging from Rs. 5,000 to 6,000 which is only enough to meet family expenses. The income from residential house is always assessed in the individual hands. If the ancestral nucleus is insignificant it cannot be inferred that the subsequent acquisitions were out of ancestral nucleus. Thus, the properties are not HUF properties but individual properties. Thus, he did not accept the assessee’s claim that he constituted HUF in respect of immovable properties. Thus, the income from the immovable properties was included in his individual assessment in all these years.

2. On appeal, the AAC held that the source for the construction of the hospital building has come from professional income only. There was neither any joint family fund nor any pooling of individual income with family funds. There was no surplus agricultural income for the family. The purchase of agricultural property in 1963 and 1967 would have also come from the savings out of his professional income only. The assessee’s representative admitted that the source for investment in hospital building has come from the assessee’s professional income only. Thus, there was no question of any ancestral nucleus relatable to the acquisition of the assets by the assessee. There should be adequate evidence of joint family property to co-relate the subsequent acquisitions if such acquisitions were to be claimed as the property of the family. The nucleus, if any, should be such that with itself the property claimed to be joint could have been acquired, but there was no definite nucleus in this case. Thus, he held that the income assessed belongs to individual only and not to HUF He did not also accept the contention of the assessee that a smaller portion of the investment in the building might have come from the savings out of ancestral agricultural income and, since, there was indiscriminate blending of funds of the family and of the individual, the property acquires the characteristic of a joint family ownership. He held that the facts of the case do not show that there was any joint family fund utilised for the construction of the building. Thus, he upheld the assessment orders. Against this the assessee has preferred these appeals.

3. The learned counsel for the assessee strongly urged that the assessee got 17 acres of land on partition of the joint family in 1956 between his father, himself and his brother. There was, thus, some agricultural income of the HUE however negligible it may be. That agricultural income, has been mixed up with the individual income of the assessee. Under such circumstances, it should be presumed that both are blended and the acquisition of immovable property, i.e., the hospital building, was out of HUF funds. He placed reliance on a decision in P.N. Venkatasubramania Iyer v. P.N. Easwara Iyer AIR 1966 Mad. 266. Thus, he urged that the income from the ho