Current-year deduction and additional grounds: actual expenditure was allowed despite amortisation, but prior-year income could not be adjusted.

Actual expenditure incurred in the relevant year remains deductible even if the accounts amortise it over the contract period, so Direct Marketing Agent commission was allowed on a current-year basis. An appellate authority may admit an additional ground and supporting material where the relevant facts are already on record and no fresh factual inquiry is needed; the computational correction concerning delinquency support and bad debts was therefore upheld. No deduction can be claimed in the year under appeal for delinquency support income allegedly taxed in earlier years without a statutory basis for shifting that relief to the current year.

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Issues: (i) whether the entire Direct Marketing Agent commission incurred during the year was allowable as deduction despite the assessee's accounting treatment of amortisation; (ii) whether the additional ground relating to delinquency support and bad debts, together with supporting evidence, was validly admitted and allowed; and (iii) whether deduction could be granted in the year under appeal for delinquency support income already taxed in earlier years.

Issue (i): Whether the entire Direct Marketing Agent commission incurred during the year was allowable as deduction despite the assessee's accounting treatment of amortisation.

Analysis: The same expenditure had already been held allowable in the assessee's own earlier years. The accounting treatment of spreading the expense over the contract period did not control the tax deduction where the expenditure had been incurred during the year. The principle applied was that actual expenditure incurred in the relevant year is deductible notwithstanding amortisation in the books.

Conclusion: The entire Direct Marketing Agent commission was allowable as deduction, and the Revenue's challenge failed.

Issue (ii): Whether the additional ground relating to delinquency support and bad debts, together with supporting evidence, was validly admitted and allowed.

Analysis: The appellate authority was entitled to admit an additional ground where the relevant facts were already on record and no fresh factual inquiry was required. The supporting agreement was not the basis of the allowance, which rested on a computational correction showing that income had been inadvertently offered twice or included at a higher figure. No procedural illegality in admitting additional evidence was established.

Conclusion: The additional ground and supporting evidence were validly admitted, and the allowance of the claim was upheld.

Issue (iii): Whether deduction could be granted in the year under appeal for delinquency support income already taxed in earlier years.

Analysis: The claim related to income allegedly offered or taxed in prior years, but no statutory basis existed to grant a deduction in the current year for excess income of earlier years not directly before the appellate forum. Relief for earlier years, where available, lay through the appropriate proceedings for those years, including rectification where already initiated.

Conclusion: No deduction could be granted in the year under appeal for amounts pertaining to earlier years, and the assessee's challenge failed on this issue.

Final Conclusion: The Revenue's appeals were rejected, the assessee obtained relief on the contemporaneous deduction and related computational issues, but no relief was allowed for prior-year claims outside the year under appeal.

Ratio Decidendi: For tax purposes, expenditure actually incurred in the relevant year is deductible notwithstanding its amortisation in the accounts, and an appellate authority may admit and decide an additional ground where the necessary facts are already on record, but no deduction can be granted in a current year for income allegedly offered in earlier years without a statutory basis for such adjustment.

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