Change in Inventory Valuation Method Allowed if Based on AS 2

ACIT  Vs Thiagarajar Mills Ltd. (ITAT Chennai) The issue under consideration is whether the change in method of valuation of inventory is allowed if it is based on AS 2 as prescribed by ICAI? In the instant case, the assessee was earlier following the market value method for valuing finished goods consistently in preceding years which was accepted by Revenue. The assessee changed method of valuing finished goods in the previous year relevant to impugned assessment year from ‘market value’ method to ‘cost or market value which ever is lower’ method. ITAT states that, undisputedly meth...