INCOME TAX

Evening Star, Issue 19310, 24 July 1926, Page 4

INCOME TAX

AUEGEB FALSE RETURNS NOT A WILFUL ERROR [Per United Pkess Association.! WELLINGTON, July 23. Charles Camperdown Odlin wal charged in the Magistrate’s Court today with wilfully or negligently making a false return as to his income for the years ended March 31, 1922, to 1925 inclusive, and the C. A; Odlin Timber and Hardware Company was charged with wilfully making false returns for the years ended September •30, 1921, to 1924 inclusive. Odlin was further charged with wilfully making false returns in respect of the income of the company for the years ended September 30, 1921, to 1924, and also with aiding and abetting the.company to make false returns.

Mr H. T. O’Leary, who appeared for Odlin, said he was not prepared at the moment to go on with the personal cllSf££6* Mr P. S. K. Macassey, for the Crown, objected. The Magistrate said he thought the cases would have to be taken m their order, and Mr O’Leary was : therefore granted a concession of an hour. On the resumption of the case, Mr J. M. Tudhope said he proposed, with the consent of the other side, to take the charges together. The charges were alternative, but counsel contended that the defendant must have known that the returns wore . false. He proposed to ask for a conviction on the first charge in each case. Recently, Mr Tudhope said, Sir Cutforth (inspector) investigated the books and affairs of tlio company and the John Odlin Company. In the course of his investigations he found that Odlin’s return of his own personal income had been considerably understated for some years past. Counsel proposed to call evidence of the previous year’s deficiency in order to prove system. Mr Tudhope quoted figures relating to th< amount of income. The taxable in* come for the year ended - March 31, 1921 (£1,405), was shown as the income returned, whereas £2 t 415 was the income shown on investigation, the difference being £l,OlO. The deficiency tax assessed on the income returned was £123, tho tax payable on the true income was £331, and the tax evaded was £203. The tax evaded for the other years was 1922. £138; 192-3, £123; 1924, £99; 1925, £ll3. Over five years the income returned had been shown as £6,620, whereas the income shown by investigation was £11,404 a deficiency in the income returned, of £4,783. The tax assessed on tho income returned was £386, the tax payable on the true income was £1,069, and tho tax evaded was £683. Mr R. Kennedy (for the defence) stated that the defendant had twd main sources of income—receipts l by way of dividends from O. and A. Odlin, anil by way of dividends from John OdHn, Limited. He received salaries and directors’ fees in respect of both companies. It was his practice to traps, fer these amounts to the credit of C. C. Odlin in the account of John Odlin, Ltd. This account was not used as an investment account, but was current and constantly varying. In no case did C. C. Odlin actually handle the interest accruing from the account. It was au actual fact that the income tax returns were not prepared by Odlin himself, but by his bookkeeper, and when Odlin had signed the returns ho took them to bo correct, and, further, ho did not have in mind tlio interest accruing to his current account with. John Odlin, Ltd. Counsel contended that the prosecution had to prove that Odlin had intentionally put .in falsa income tax returns, whereas in actual fact the error was made inadvertently, Charles Camperdown Odlin, the defendant. stated that his account with John Odlin was a current account. All dividends from O. and A>. Odlin and John Odlin, Ltd., were paid into tlua account. . Mr O’Leary; At any time have you drawn interest on this account?—— Never in the history of the account. All your transactions are clearly shown in the books of John Od.lll, Ltd.?—That is so. . Proceeding, witness stated that all the income tax returns had been prepared by Mr Macleod, secretary of John Odlin’s, Ltd. Mr O’Leary: In signing these returns did it ever occur to you that each year there was accumulating in John Odlin’s account interest that was taxable?—Never at all. , Witness stated that in 1920 he went to America on a business visit. On nxs return ho considered that he spout more than the amount allowed for tbs expenses of the trip, and a of shareholders passed the sum of £o(JO to reimburse him. “When I received this I did not believe it to he a bonus, but (simply reimbursement or expenditure while abroad. Until the entry had been queried by the inspector 'I did not know that it had .been entered as a bonus in the minute book.” . „ ~ . Norman D. Macleod (bookkeeper, of John Odlin, Ltd.) stated that he had prepared the income tax returns of the defendant, and was unaware that the credit standing to C. C. Odlin s account was taxable income. Witness stated that when given returns to sign Mr Odlin had made only a hurried perusal of them. . Mr O’Leary submitted that after tho hearing of the evidence of wilfully entering a false return, otherwise perpetrating fraud, should not be entered. An error had certainly been made, said counsel, but it had been made inadvertently and not wilfUHi's Worship imposed a conviction on the alternative charge of ucg (gently making false returns, and intimated that ho would assess tho penalty after the further charges had been 'disposed of. _______