Court Upholds FIFO, Weighted Average for Inventory Valuation; No Right to Prefer LIFO Over Statutory Methods.

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....Constitutionality and legality of Income Computation and Disclosure Standards (ICDS) II and Notification 87/2016, which mandate the use of the First In First Out (FIFO) or Weighted Average Cost method for inventory valuation, excluding the Last In First Out (LIFO) method, while computing income under the head of Profits and Gains of Business or Profession under the Income Tax Act. The court held that FIFO, LIFO, and Weighted Average Cost are recognized methods for inventory valuation, and the adoption of any particular method aims to reflect the fairest approximation of the cost incurred. The valuation of unsold stock is a necessary process for determining trading results, not the source of profits. The amendment to Section 145A and ICDS II.........