why didnt the group believe the time traveler had working time machine?

Though they all basically function as one character, the Medicine Man and the Psychologist stand out among the Time Traveler's dinner guests in their scientific appraisals (and critiques) of his time-travel theories. They also are reminders of Victorian luxury, able to gather for a leisurely evening of discussion. Their skepticism of the TT's story seems to rest less on the implausibility of a Time Machine, and more on the TT's vision of the class-divided future. The dinner guests ignore that they are on their way to becoming the dependent Eloi and that the working class around them is turning into the Morlocks. Wells uses them as a counterpoint to the narrator, with whom we instantly side; we should follow the idealistic narrator in his desire to change the present for the benefit of the future, rather than the cynical dinner guests who complacently go about their present business.