The inventory shall be valued on the basis of cost or market price ,which ever is less.
It shall also include the amount of any tax ,duty, cess or fees paid or Liability in incurred for the same under any law in force.
Where an assessee converts his capital assets into stock in trade and start dealing in them the value of such stock will be the market value as on the date of their conversion into stock in trade and not original cost.
However, such conversion shall be a transferu/s 2 (47) and liable to pay tax under the head capital gains.
Bank valuing stock in trade (investments) at a cost in the balance sheet in accordance with banking regulation act and valuing same the investments at cost or market price ,whichever is less for income tax purpose the method is valid and cannot be rejected.
