FALSE TAX RETURNS.

New Zealand Herald, Volume LXV, Issue 19956, 26 May 1928, Page 12

FALSE TAX RETURNS.

HUNTLY BAKER CONVICTED. FINES AMOUNT TO £125. SHORTAGES IN FIVE YEARS. " MUST MAKE HONEST RETURNS." Fines totalling £125 were imposed on Alexander Shand, middle-aged, a baker at Huntly, charged in the Police Court yesterday with wilfully making false returns of income derived by him for five years, from March, 1923, to March, 1927. Pleas of not guilty were entered on all charges. Holding Shand guilty, and imposing fines of £25 on each count, Mr. F. K. Hunt, S.M., said: "I am satisfied defendant knew perfectly well what he was doing. He was banking plenty of money and returning false particulars to hoodwink the department. If that is not wilful, I do not know what is. This should make people like this return honest statements."' The minimum fine for the offence fs £2, and the maximum £IOO. Total Deficiency o! £307. Pictures put forward by Mr. Hubble, for the Income Tax Department, showed discrepancies in the return made by Shand, and that assessed, after investigation, by an inspector of the Department. Following were the returns made by Shand, with the assessed income in parentheses:—l 923, £361 (£1250); 1924, £387 (£1250); 1925, £4BB (£1067); 1926, £694 (£1350); 1927, £406 (£1400). Tax paid by Shand in 1923 was £1 3s 2d; in 1924, 10s 3d; in 1925, £4 18s 9d; in 1926, £l2 4s; and in 1927, 10s lid. The tax payable, according to the inspector's return, was £7O 3s 6d, £SB 12s id, £44 0s 7d, £65 18s 3d, and £B7 19s 3d. The total deficiency in tax was £307 19s 7d. " In the year ended March 31, 1923, Shand returned a profit as £361," Mr. Hubble said. " During that year he made the following lodgments, which are, or* course, over and above living expenses, which cannot be traced from the books kept. Placed in the Post Office Savings Bank was £489 and in the Auckland Savings Bank £2OO. The return made in 1924 was £387, and during that year lodgments were made as follows: —Post Office Savings Bank, £426; fixed deposit, Bank of New Zealand, £350; added to mortgage of £BOO to £IOOO, £2OO. Lodgments in 1926 and 1927. " During 1925, when the return made was £4BB, lodgments were made as follows:—Post Office Savings Bank, £4OO, and Bank of New Zealand £3OO. Lodgments made in 1926, when the return was £694, were: Post Office Savines Bank. £500; Bank of New Zealand, lixed deposit, £250. " The return made in 1927 was £406 and the lodgments made in that year were £590 in the Post Office Savings Bank and £4OO in the Bank of New Zealand, fixed deposit. " The books do not show any of those withdrawals, although on being questioned defendant admitted these amounts came out of the business," continued Mr. Hubble. "Looked at from another point of view, while the defendant was making the above small returns, he put on mortgage £IOOO in March, 1924; £IOOO in February, 1925; and £7OO in April 1926." Replies to Inspector's Queries. Questions asked Shand by the inspector inquiring on behalf of the department were:—"Cau you explain where the various lodgments in your Post Office Savings Bank account since April, 1922, came from ? Where did the lodgment of March 6, 1923, of £2OO in the Auckland Savings Bank come from ? What explanation have you to offer for numerous lodgments in the Post Office Savings Bank account of Mrs. -Shand requiring explanations as to how and where obtained, particularly the lodgments of £350 on March 28, 1927, and of £4OO on August 24, 1927?" Replying to the inspector, Shand had at first said he did not know, but eventually he had. been forced to admit that they came out of the business. The Magistrate: Forced to admit ? Perhaps you had better say he was "obliged to admit." "Forced to admit" savours of third degree methods. Mr. Terry, for Shand: That was the trouble. Shand was so bewildered he would say anything at the time. " Wile Ran the Business." Giving evidence, Shand said in 1922 his wife had £IOOO from her mother's estate and other capital. If he wanted financial assistance his wife gave it. Besides this she was "the business one" and ran the business. "I understand now that the books I kept were all wrong, but they were in such a way that I knew what they meant." (Laughter.) Cross-examined by Mr. Hubble, Shand admitted that some of the money paid into the Post Office Sayings Bank account came out of the business. He knew money was lent on mortgage and that other sums were on fixed deposit. "Did it not dawn on you that you were gradually accumulating wealth—that you were getting rich?" asked counsel. Shand answered that he had not thought of it. Mr. Hubble: Did it not occur to you that you were getting out remarkably lightly when your tax was only 10s and £1 and £4? Mr. Terry: He did not know much about income-tax. Mr. Hubble: I think he knew a lot about it. Mr. Terry: He does now. "Did you know your books were all wrong?" asked Mr. Hubble. Witness: I thought they were right. Mr. Terry: He thought he had to return "the income after the business had been run. Whether the explanation is good, bad or indifferent it is his statement, and you must accept it. No Wilful Attempt at Fraud. "I am asking Your Worship to believe that Shand put in his return, no doubt haphazardlv, as he thought correctly," said Mr. Terry, in addressing the Court. "He is a thrifty, industrious baker, but his knowledge of accountancy is elementary and poor. No conscious effort was made by him to defraud the dejwitrient. "The business was run as a partnership between Shand and his wife. All her moneys intermingled with his. Even pltboutrh on the figures the returns as rendered are incorrect, I ask von to believe that he did not do it wilfully. And tho charges we have to answer are that incorrect returns were wilfully made.