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On the bare perusal of the above, it is evident that the inventories should compulsory be valued at lower of the following:

• Cost price • Net realizable value

27. It is mandatory to follow AS-2for valuation of inventory at the time of valuation of inventory. Further, it is humbly submitted that Ld. AO has not pointed out any discrepancies in valuation of inventory basis AS-2 followed by the Appellant as the same had been consistently and regularly followed by Appellant.

28. The Appellant has regularly followed valuation of finished goods at lower of cost or net realizable value after following stock ageing effect. This approached/manner of valuation of stock was prevalent in previous assessment year also including AY 2014-15 as the opening stock was derived following the said method of accounting. The same is evident from the stock summary wherein stock of finished goods workout to Rs. 21,88,73,000/- and net realizable value is Rs. 20,54,33,000/-, the difference of Rs.1,34,40,000/-is on account of stock ageing only. The said ageing effect in opening stock has been duly considered by Ld. AO in impugned assessment order, however, the said treatment is being disputed only as far as the valuation as on date of survey is concerned. Therefore, Ld. AO is not justified in arbitrarily adopting practice of pick and choose for making impugned addition in the hands of the Appellant.