Method of accounting requirement: inventory valuation must follow accounting practice and include taxes and duties actually paid.

Valuation of purchases, sales and inventory for business income must follow the accounting method regularly employed by the assessee and be adjusted to include any tax, duty, cess or fee actually paid or incurred to bring goods to their location and condition on the valuation date; this operates notwithstanding section 145 and includes such payments under any law despite any consequential rights.

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