High Sales Figures Not Grounds for Treating Cash Deposit as Unexplained Income

Pawan International Vs ITO (ITAT Chandigarh) In the case of Pawan International vs. ITO, the ITAT Chandigarh addressed a ₹32 lakh addition made by the Assessing Officer (AO) as unexplained income from undisclosed sources. The assessee, a trader of artificial goods and flowers, explained that the cash deposits were proceeds from sales of its opening stock. The business had decided to wind up during the assessment year 2017-18, selling the stock at discounted rates, which led to higher sales compared to previous years. The assessee supported this claim with VAT/Sales Tax returns and records in...