THE INCOME TAX CASE.

Poverty Bay Herald, Volume XXXVII, Issue 12215, 3 August 1910, Page 3

THE INCOME TAX CASE.

i (Pt-rJ Press Association.) CHWISTOHURCH, last night. In the infcnme tax case Thornhill Cooper, .accountant and average adjuster, stated that Re made the total loss of the fire at the tannery £4310, not ■ £14,000, as Mr Tyers 'had stated. The loss over , the insurance was £1630. *•■ It was explained that Mr Tyers had not allowed for -salvage m his statement. The witness stated that he had examined the books and found them mixed up m a most extraordinary manner. Replying to. the Chief Justice, Mr Russell said that he could not produce direct evidence ,as to the accounts of 1905. He wanted to show that the defendants were honest, and paid every shilling of duty on their profits. The Chief Justice said that they could not do that unless they showed that they paid the duty chargeable m 1905. Robert Modlin, accountant, stated that he made the debt of Bowron Bros., London, to the Christchurch firm m 1903 £37,000, not £74,000 as shown m the books. 11l February, 1905, witness showed the balance-sheet to Geo. "Bowron, and they agreed to eliminate the debt altogether and reduce the assets. The Chief Justice : Tliis really did away with £74,0C0 ; we have not had that before. Ho asked the witness : Don't you think it strange to send £33.000 to people who were owing £74,000? Witness : It docs seem strange, if that amount were owing. To Mr Stringer : When taking out the balancersheets he did not bother about whether the firm was paying too little income tax, and never saw the returns. To Mr Russell : Witness was never instructed to witlihold the balance-sheets from Mi?-- 'Tyers, and gave him every possible information. •"CM. Olliver, accountant," stated, that the Business was converted into" a company on Jidy 31st, 1907, with a capital of**F2oß,soo. On October Ist, 1901, the capital was £87,407. There was, therefore, an accretion to capital, or profit, of £121,093. •George Bowron, one of the defendants, slated the £37,000 bad debt had been absolutely written off. The firm did liot set off the £33,000 reclamation which they sent Home, as the London firm was so badly affected by the American commercial crisis that it might have gone down without the money. Towards the end of 1907, owing to the American crisis, : there was a big drop m prices, und the firm lost about £50,000 on consignments. The firm always believed that they had rather overpaid than underpaid income-tax. On making up the return for 1905 he found that the profits were £50,000 or £60,000, and deducted the bad debt of £37,500, making the total profit about £18,000. One reason for doing this was because he did not wish anyone to know that his brothers were m a bad way. He kid ho desire to put any statutory difficulty m the way of the "Department getting all it was entitled to, and the firm gave Mr T$? rs . ever y assistance to get all possible information. The cuse was adjourned till tomorrow.