Coffee income valuation under rule 9(c) applies only after statutory opinion that regular accounting does not properly deduce income.

Section 7 requires agricultural income to be computed under the assessee's method of accounting, and the first proviso applies only where no regular method is employed or the Assessing Officer records that income cannot properly be deduced from that method. The second proviso and rule 9(c) on Coffee Board rates operate only within that statutory precondition and do not permit rejection of the assessee's valuation merely because it is lower than a three-year average. On the stated facts, no finding supported the statutory opinion requirement, so rule 9(c) could not be used to enhance the coffee income valuation.

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Issues: Whether the first proviso to section 7 and rule 9(c) could be applied to the assessee's coffee income only when the Assessing Officer first formed the requisite opinion that the income could not properly be deduced from the method of accounting regularly employed.

Analysis: Section 7 requires agricultural income to be computed according to the method of accounting regularly employed by the assessee. The first proviso operates only where no regular method is employed or where, in the opinion of the Assessing Officer, income cannot properly be deduced from that method. The second proviso, dealing with coffee crop valuation on Coffee Board rates, is not an independent charging basis but works only within the field opened by the first proviso. Rule 9(c) repeats the same conditional framework and does not authorise rejection of the assessee's valuation merely because it is lower than the average of the previous three years. In the present case, there was no finding that income could not properly be deduced from the mercantile system followed by the assessee; the assessment was made only because the declared rate did not match the average prescribed by rule 9(c), which was an erroneous approach.

Conclusion: The condition precedent for invoking the first proviso to section 7 and rule 9(c) was not satisfied. The application of rule 9(c) and the enhanced valuation were unsustainable, and the assessee succeeded.

Ratio Decidendi: The Coffee Board average under rule 9(c) can be applied only after the Assessing Officer records the statutory opinion that the assessee's regular method of accounting does not properly deduce the income.

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