Trader Sold Opening Stock at Discounted Rates leading to Higher Sales compared to Previous Years: ITAT deletes 32 Lakh Addition

The ITAT has deleted a ₹32 lakh addition made to the income of a trader who sold opening stock at discounted rates, leading to higher sales than in previous years. The authorities had initially added the amount as income due to suspected undervaluation of stock. However, the ITAT ruled that the trader’s actions were within normal business practices, and no evidence of underreporting was found. This ruling emphasizes the need for tax authorities to provide clear evidence before making income adjustments. It also underlines the importance of considering legitimate business practices while assessing tax liabilities.