FALSE RETURNS.

Auckland Star, Volume LXX, Issue 217, 14 September 1939, Page 9

FALSE RETURNS.

"BOOKIE'S" INCOME.

PLEA OF GUILTY. PROFITS SUBJECT TO TAX. £400 IN FINES TO PAY. Having failed to convince tile Income Tax Department that his income for four years was not from bookmakini but from "punting" 011 his own account, Clarence William Russell was to-day prosecuted on summons in the Police Court, before Mr. W. R. McKean, S.M., by the Commissioner of Taxes on four charges of wilfully making false returns of income derived during the years ended March 31, 1035, 1936, 1937 and 1938.

Mr. R. A. Singer represented the defendant, who pleaded guilty to each charge.

Russell, who has already paid the full amount of taxation, was mulcted a further sum of £400 in fines.

Mr. G. S. R. Meredith, who prosecuted, said Russell was well known as a bookmaker in a large way of business. In his return of income for the year 1935 defendant stated that he had made a loss of £87 13/8, whereas the Department's investigations showed that for the year his income had been £3710. For the year 1930 a return of £157 18/5 was made, whereas it was found that he had earned £1678. and in 1937 he showed a return of £438 3/11, whereas it should have been £5110. For the year ended March 31, 1938, he showed a return of £320 18/, when the true income should have been £2161. The tax which he was liable for the amounts unreturned would be over £2500. Liable to Tax.

"The suggestion has been made to the Department that defendant's earnings were not from bookmaking, but from punting on his own account," added Mr. Meredith. However, the authorities are quite clear that an income derived from a bookmaking business is an income from an illegal source, but nevertheless, the same authorities are clear that it is liable to income tax duty.

"The suggestion made to the Department by Russell was that the income not returned by him represented winnings he had made as a result of punting and not from bookmaking. Even assuming this to be correct it would not help the defendant. Gains as a result of isolated betting transactions by the man in the street are exempt from duty, but there is clear authority for the proposition that where a bookmaker makes profits from punting—and such punting is systematic—then that is a business, and the profits are liable to income tax duty."

"ihe gravity of these offences," said -Mr. Meredith, "lies in the fact that they are offences against the revenue and were a deliberate attempt to defraud the State of a considerable sum of money. I submit that when that occurs the Court will always impose a penalty consistent with the nature of the offence. In the circumstances I must ask for a heavy penalty. JTe is liable for a maximum fine of £100 or a fine not less than £2 for each offence." All Taxes Paid. Mr. Singer said defendant had no means of contesting the assessments that had been made and the figures would have to be accepted because the results of the transactions carried out by defendant probably justified the allegations as to the amounts. The attitude taken up by Russell was that the ordinary citizen was not subject to taxation in respect to income as he had derived it. However, the Department had held that these amounts were taxable, whereupon Russell had promptly paid the amounts claimed, plus 5 per cent penalty. Mr. Singer asked the magistrate to take this into consideration in fixing the penalty. Defendant realised that argument concerning his liability was useless.

"These were wilful attempts to deceive," said Mr. McKean. "Having regard to the return of income, there ie> very little that can be said in mitigation of penalty. I would not "be jlistilied in imposing a penalty less than the maximum. Oil each of the four charges defendant will be fined £100."