Disallowance Of Stock Write-Down U/s 37(1) Without Examining Evidence Is Unjustified: ITAT Remands Matter

The ITAT has remanded a case back to the assessing officer because it found that the disallowance of a stock write-down (i.e., reduction in the value of inventory) under section 37(1) was made without sufficiently examining the assessee’s evidence. The Tribunal noted that before declining the claim for write-down, the officer needed to scrutinize supporting data, purchase / sale records, and justification for the write-down. This decision safeguards the taxpayer’s right to fair adjudication, emphasises procedural fairness, and underscores that inventory valuation adjustments (especially write-downs) require substantive review rather than summary denial.