Rockburst is a hazardous phenomenon in deep tunnels influenced by geological structural planes like faults, joints, and shear planes. Small-scale shear-plane-like structures have damaging impact on the boundaries of the tunnel, which accumulate high stresses. Such a shear plane was exposed in the side wall of the right headrace tunnel in the Neelum-Jehlum Hydropower Project. This project is constructed in the tectonically active Himalayas with high stress conditions. A shear plane combined with high stress conditions is very dangerous in deep excavations. The influence of a shear zone on rockburst occurrence near a tunnel is studied. The FLAC3D explicit code simulated the shear zone in the right tunnel, revealing that the stresses are concentrated near the shear zone, with no stress concentration in the left tunnel, which has neither shear zone nor rockburst. Rock mass was displaced near this shear zone even before excavation. Modeling results confirm that the side wall shear zone of the tunnel has a major influence on rockburst occurrence. A shear slip along this plane released huge amounts of energy, causing human fatalities and property damage. A numerical simulation validates the actual conditions and helps us understand the phenomenon of stress concentration near the shear zone and its impact during deep tunneling.