SMT. SRILEKHA BANERJEE AND OTHERS vs COMMISSIONER OF INCOME-TAX, BIHAR AND ORISSA

The Supreme Court held that under the Indian Income-tax Act, 1922, the burden of proof lies on the assessee to establish that the encashed amount from high denomination notes is not income. The Court clarified that if the assessee presents an explanation regarding the source of the funds, the department must demonstrate inherent weaknesses in that explanation before rejecting it. In this case, the Court upheld the department's assessment of Rs. 51,000 as assessable income from an undisclosed source due to the lack of convincing evidence from the assessee.