"It should be debit to loss on sale of inventory instead debit to cost of goods sold. isn't it ?"

The point of the sale price identifying what was purchased is how you determine which things carry gain, loss, are ordinary income, etc. That's why both parties are supposed to agree to the details.

This sale of inventory is no different than if they sold all their stuff at a deep discount, because it is about to spoil. You know the business data reflects the "sold at a loss to COGS" and that's all you are doing. There is no Special Loss for this.

You should find a mentor to work with you. It's hard to tell if you are overlooking something else or treating something else incorrectly for your client.