Estimated valuation method governs coffee income assessment where accepted by the Department and not shown to be unrealistic.

Income from coffee points was required to be assessed on the assessee's consistently adopted estimated valuation under the mercantile system, because the Department had accepted that method and no finding showed it to be unacceptable or the estimate unduly low. The subsequent declaration of the Coffee Board's final dividend before completion of assessment did not, by itself, justify replacing the estimate with the later dividend figure. Applying Section 7 read with Rule 9(c) of the Karnataka Agricultural Income-tax Rules, 1957, the assessment basis remained the assessee's estimate and the point was decided in the assessee's favour.

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Issues: Whether, for the assessment years in question, the income from coffee points was to be computed on the basis of the value estimated by the assessee in the return under the mercantile system of accounting, or on the basis of the final dividend declared by the Coffee Board before completion of assessment.

Analysis: The assessee had consistently adopted an estimated valuation method, and that method had been accepted by the Department. In the absence of any finding that the method of accounting was unacceptable or that the estimate was unduly low, the mere fact that the Coffee Board declared the final dividend before the assessments were completed did not justify departure from the assessee's estimate. The decision was supported by Section 7 read with Rule 9(c) of the Karnataka Agricultural Income-tax Rules, 1957.

Conclusion: The basis of assessment had to be the value estimated by the assessee, not the subsequently declared final dividend, and the finding was in favour of the assessee.

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