https://www.taxtmi.com/caselaws?id=168512 For income tax purposes, closing stock must be valued by a method that most fairly reflects the true profits and gains of the year, and there is no rigid rule requiring cost or market value, whichever is lower. A valuation method may be rejected if it is artificial, unreal, or likely to anticipate future profits rather than measure year-end value. On that basis, a replacement-value formula based on reduced retail price was not accepted because it distorted taxable profits, while a retail selling price less direct selling expenses was treated as a more reliable approximation of stock value. Longstanding acceptance of a practice did not prevent correction where it failed to disclose true profits. en-us Wed, 05 May 1971 00:00:00 +0530 Tue, 10 Mar 2015 18:00:17 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=168512 For income tax purposes, closing stock must be valued by a method that most fairly reflects the true profits and gains of the year, and there is no rigid rule requiring cost or market value, whichever is lower. A valuation method may be rejected if it is artificial, unreal, or likely to anticipate future profits rather than measure year-end value. On that basis, a replacement-value formula based on reduced retail price was not accepted because it distorted taxable profits, while a retail selling price less direct selling expenses was treated as a more reliable approximation of stock value. Longstanding acceptance of a practice did not prevent correction where it failed to disclose true profits. Case-Laws Income Tax Wed, 05 May 1971 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=168512