What is the ruling on buying a commodity for five dinars then selling it to the same person for seven dinars?
Selling a commodity for five dinars cash and then selling it to the same person for seven dinars on credit is the prohibited 'inah transaction, based on the Prophet's (peace be upon him) saying: "When you engage in 'inah transactions, and hold onto the tails of cattle, and are content with cultivation, and abandon jihad, Allah will inflict upon you humiliation which He will not remove until you return to your religion." The reason for its prohibition is that it is a stratagem for usury, as its reality is taking cash for a larger deferred amount, with the commodity returning to its original owner. The 'inah transaction does not occur if the second sale is at the same price as the first sale, or at a price higher than the deferred sale price, or less than the cash sale price, or if the commodity changed or incurred a defect. As for buying for five and selling for seven in cash, or buying for five on credit and selling for seven in cash, there is no harm in that.
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