INCOME TAX RETURNS

Otago Witness, Issue 3611, 29 May 1923, Page 49

INCOME TAX RETURNS

CHARGES OF MAKING FALSE RETURNS. David Lawrence Christie and William Christie, his son, were charged before Mi 11. W. Bundle, S.M., at tne ( ity Police Court on Friday with having acten in such a manner as to avoid payment of income tax. The elder was charged with having in 1919, 1920, 1921, and 1922 wilfully made false returns under the Land and Income Tax Act, relating to his income for the years named. The younger was charged with aiding and abetting. Mr Adams appeared for the Commissioner of Taxes and Mr Hay for defendants, both of whom pleaded guilty. Mr Adams explained that the charges related to four successive years, during which defendants had sent in returns showing that the income was about £2OO each year. Counsel proceeded at great length to refer -Mr Bundle to a statement of figures submitted for his inspection and guidance, and said that defendants sent in returns for the four years stated showing an income on each occasion of approximately £2oo—the highest being £231 and the lowest £207, the total for the four years being £684. As a result of investigations an assessment was now made at £4643. Mr Adams added that for the 1918 year (which was beyond the statutory limit) the return was £2Ol and the new assessment £976. Over a period of nine years there was only one occasion upon which defendants had paid any tax at all, and that was when the department learned that a sum of £BO earned in interest had not been included, and demanded tax amounting t 0 13s 9d. This was paid. Ihe returns had always been made out and sent in by the son, who had signed them in his father’s behalf. But the father could not be altogether ignorant of the position. The case was one which, counsel suggested, should he viewed somewhat seriously. Mr ] lay said the position arose through no proper account being kept by Mr D. Christie. There had never been a balance sheet at any time to ascertain what the position of matters was, and the figures used were only approximate. It was a matter of seme difficulty as everyone knew to make a correct income return. Mr Christie was 67 years of age, and about 36 years ago started a small flourmill business at Lawrence with another man. It ran for 10 years with t'no two working the business. Then in 1895 Mr Christie took over the business and became sole owner up to the present. He never employed any assistance in the business outside his son. The plea of guilty was that the actual returns put in were not correct. T here were no books from which to make out a correct return. Mr Christie said that the last year's business was not more than 500 tons of flour and that the profit was not more than £2 10s on an average. Ihero had been accumulated profits from this man s life work, but the figures before bis Worship they could not admit as conveying a correct statement cf the position. Unfortunately proper books had never been kept, and there had never been a proper audit or balance sheet. Mr Christie, sen., bad depended upon his son for a number of years. The son had sent in the returns, and Mr Christie, sen., had never seen them, nor was competent to know details ?f the figures. He did not, however, intend to put the blame on his son, who was not a competent accountant. He had never attempted to have an audit, and the figures were arrived at from scraps’. For five years Mr Christie had been in ill-health, with the result that ihe burden of running the business had fallen upon the son, who was only receiving a salary. He was acting as a servant. This matter had got so much upon his mind that it would have been dangerous to bring him before the court. Defendant had now sold out of the business.

Mr Adams pointed out that certain books had been kept and that there had been a fairly complete system of book-keeping. When the inspector had gone to the mill he had been offered every facility, and was given information to the best of defendant s ability. He had got information as to the working of the business from the son. but it had been from the father he had obtained information about ■he investments. The figures adopted bv the inspector had been taken from the returns. Mr Bundle said the net income as returnod for the four years showed a great, similarity It was from £207 to £231," and t-ie income as assessed by the department was from £431 to £2400 last year. It was suggested that there was an error in these figures. Making allowances, the net income returned was 25 per cent, of ' the actual income. It was stated that every information had been given in making up the returns since, but neither defendant could think that the correct returns were being- supplied. H e did not think that could be suggested. One of them should have known that the figures were not correct. The difficulty was to fix- (he penalty in a case cf this kind. All the court was concerned with was whether there had been an offence under the Act. The defendant, D. L. Christie, would be fined £3O 011 each charge, and Wm. Christie would bo fined £lO on each charge with costs.