RETURNS NOT MADE

Evening Post, Volume CXIV, Issue 19, 22 July 1932, Page 8

RETURNS NOT MADE

FOUR YEARS' INCOME

SHAREBROKER-CHARGED

HEAVY PINES IMPOSED

i Stating that Uie^supposed a'-firm of the class the defendant was associated with would know as well . as anyone the need of furnishing returns of income to the Income Tax Department, Mr.'E. Page, S.M.,;to-day inflicted fines totaling 5275 dnv;.ic^ u dei-Frederick Ryland, managing director of Messrs. K. fecott Gandy and Co., Ltd. (in liquidation), for.failing to furnish income axtctnmslor the years 1928. 1929, 1930, and 1931. The Magistrate.Stated that; the profits of!tlie' C pmpahy,.wh'eii it was a partnei'ship between the detendant aud'Tinotlier man; for the years 1928,-1929, and 1930 were £1911 18s lid, £2534 Cs Id, aud £2813 5s 4d respectively. Tho fourth charge against Mr. Eyland was: in respect of his salary of £1000 as managing director of the firm, * which in 1930 had been .turned into a Umited liability company. .

Counsel for the. Income Tax Department said that the first three informations, covering .tho ; years 1928, 1929, and .1930, Were :in respect- of • .a ■'■ partnership consisting of defendant and another man. During the years.ending 31st March; a92Bi 1929, and 1930, said counsel, defendant .carried on business with the; other ,man as' sharebrokers under the name of K. Scott Gandy and Co. >In April, 1930'1'; the partnership was dissolved, the defendant buying out _ his ..: partner. Subsequently, the business was formed into a limited liability company and the ;defeh'dant was' appointed; managing } - director. During the, three; years of: the partnership the company furnished no ; returns of income arid, paid:, no income taxi Tho existence of the 'company vvxis not known to the Income: Tax-Department until notice of its dissolution;was^observed in the "Gazette."' The Com/ missioner of Taxes wrote to Mr. Kyland. asking him to furnish returns of income for the firjii, but without result. Since that date efforts had; been mado-b6thvby,the Income Tax Department and-Hhe' Crown Law Office 'to obtain information as tb the firm's income during the three years of its existence,1 but without success) although Mr. Ryland repeatedly said he was working on. the matter aad would furnish returns shortly. ■' v* s ■ . ( TEES ESTIMATED.^ '.'Wedo not know what the-firm's net income was," said, counsel,■;;•'but during >.his ■_-- investigations,; of . the affairs of a' big" development company Mr. Bichardsbn, an income-tax inspector, ascertained;' that the develop-' inent company during; the years in questio.n had paid to Mr. Eyland's firm £.21,000 ia brokerage and secretarial fees. Wo do not . suggest that .the' firm's net income amounted- to 'anything like that sum, as there,- would' be a considerable amount of expenses and outgoings in a business of this 'kind, but a fair pfopdrtipn of .it would represent profit." v'<i ''•,:' '.■"■■' -.-,.. Counsel for the- def endantYsiia"; that tho case had been, first called;ih Court five 'weeks'ago, and; since', .then ■ his; client and himself had been continuously, ■ engaged in; endeavouring to furnish the. necessary "returns. ■■...'■■■,.:- :•; . . BimDEkp^D|iraNi)AKT: , . The defendant, said counsel,; started: business in a "comparatively small way and quickly, built up a'business witha large turnover.. The whole (burden: of the business f ell ( oil the defendant, who-had-to. run the business: and also get new. businesgivaVThd fact' that it took;six weoks thereturns after the summons been served indicated; that it was impossible for a ni&n as busily^;engaged a&:the defendant' ,to devpte^thc ;necessary time to ,eompleting\his'.income, returns.-,, Tliei expenses of, getting. 'bus,bies's'■; 'wereenornious," and the; company: which took over the partnership had 'been ' com-' pplled; to go intp 'liquidation. V^;, ■-.'•■', ; iTREASbNABI.E; PENALTY;ASKED. After handing the; MagistratQ, a paper on ,which : the ;proflts of /the. partner-.' ship were, set out,' counsel said that the .figures; erfed; if anything^oh* the side of being i too greats sas in a business of ,the type,,engaged in ; ,,by; his .client it; was, impossible ■to keep, an> accurate check on expenditure.' It was"submitted; that there; had Vbeejufio .attempt to' evade furnishing returns. ;.Counsel ask-: ed that, a reasonable penalty' should be imposed;sothat the defendant would have a- chance :to pay it. ■; i; '■:■. < • ; "■'.; The Magistrate said it' was ;'clear that ho'Hvould.have rto'iniposo: a"slibstantial penalty. Th& defendant would be fine* £100; for each. of : ;the;flrst twq.'xears and s£so for .the thiTd year, FoVfailing, toisend has personal return for the s 'year.;i93Vhe would be fined- £25. V: . Counsel' stated that the defendant had earned no moiey since October, and suggested. that he" should be' given at least "three , months 'in": which to • endeavour :to meet the fine. ;f f >■ . " /Mr. Page informed" counsel that, he had better write to him!.submitting- the defendant's fin'aricial;.position and assets and he would''then' consider the ■question^; '.-d ■//: ( . J;,.-'.1 .?^ii,:.;..;-/ j-'-'. ::