Taxation of stock in trade at the time of takeover

Hello.,

A firm has been takenover by a company and all the liabilities and assets including Debtors, Creditors and Stock in Trade is transferred to company at book values.Stock is valued at cost or NRV whichever is lower. Now can transfer of stock be treated as sale and income tax be levied by taking profit @ average gross profit rate on the closing stock? If not what is the appropriate treatment? Also kindly suggest any relevant case laws on the above matter.