Historians state the surname is a distorted form of Bhatta, which originates from Sanskrit (भटट), meaning "scholar" according to Brāhmaṇa. While the original shortened rendition of the Bhate,"Bhatta" caste was "Bhat" or "Bhatt," many of the migrants to the Punjab, started spelling their surname as "But" or "Butt" which is the spelling of the clan used in the Pahari language. The difference in spelling between "Bhat" (used in Kashmir) and "Butt" (used in Punjab) is because at the time of the last British census, the governors of the two provinces used different spellings. Since ancient times, Kashmiri traders would spend summers at home in Kashmir preparing their goods (carpets, shawls etc.) and in the winter months, would migrate to prosperous Punjab to trade their goods. Those that were trading in Punjab or settled in Punjab at the time of the census started spelling "Bhat" as "Butt" due to the British governors' interpretation. In 1947, those who were in Punjab decided to stay due to the uncertain future of Kashmir and kept using "Butt", while some returned to Kashmir but continued using "Butt".
People named Bhat were said to be a clan of Brahmin descents of intellectual Vedic and Dardic saints that inhabited the banks of the Saraswati River, which ran dry around 2000 BC. This forced the community to migrate to Kashmir in search of "ultimate truth". Up to about the beginning of the 13th century, Islam became the dominant religion in Kashmir as a large number of Kashmiri Pandits converted to Islam.