Double deduction barred for copyright settlement payment already reflected in an earlier bad debt write-off.

Payment made to settle a copyright claim was not allowable as a deduction for the relevant year because the liability was already known when the film asset was taken over and had been effectively absorbed in an earlier write-off allowed as a bad debt. The fact that the payment related to a film asset, or that the film had generated little income, did not change the character of the expenditure. Allowing the later payment as a business deduction would have permitted the same amount to be claimed twice, so the expenditure was disallowed.

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Issues: Whether the payment made in settlement of a copyright claim was an admissible expenditure for the relevant year of account.

Analysis: The payment was not accepted as capital expenditure merely because it related to a film asset taken over by the assessee, nor was its allowability denied merely because the film had yielded little or no income in the year of account. The decisive ground was that the liability had been known at the time the film was taken over and the corresponding amount had already been effectively absorbed in the earlier write-off allowed as a bad debt. Allowing the later payment again as a business deduction would result in the same amount being claimed twice over.

Conclusion: The expenditure was not admissible as a deduction for the year of account and the answer was against the assessee.

Ratio Decidendi: An amount cannot be allowed twice over as a deduction, once as a bad debt adjustment and again as business expenditure, where the later payment merely satisfies a liability already reflected in the earlier valuation of the asset taken over.

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