Unaccounted income and concealment: Delhi HC upheld addition where SEC material and the assessee's own admissions supported the Revenue.

SEC-derived material and the assessee's own letters seeking spreading of the amount over assessment years and offering surrender were treated as sufficient evidence that funds had been kept outside the books for illegitimate purposes. The Delhi HC held that the Tribunal could not displace this material by relying on local investigations, and that a mere agreement to add an amount to income does not, by itself, negate concealment. On these facts, the deletion of the addition for undisclosed income was held to be unsustainable, and the issue was decided in favour of the Revenue.

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Issues: Whether the Income-tax Appellate Tribunal was justified in deleting the addition made towards undisclosed income allegedly kept outside the books of account and reflected in the SEC material.

Analysis: The material arising from the SEC investigation, coupled with the assessee's own letters seeking spreading of the amount over the relevant assessment years and expressing willingness to surrender the amount, furnished sufficient evidence that funds had been kept outside the books for illegitimate purposes. The Tribunal's reliance on local investigations to displace this material was found unsustainable. Mere agreement to add an amount to income does not, as a universal rule, eliminate concealment, but on the facts here the record showed unaccounted amounts and an admission made after foreign investigation.

Conclusion: The question was answered in the negative. The deletion of the addition was held to be incorrect and the issue was decided in favour of the Revenue and against the assessee.

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