INCOME TAX CASE.

Timaru Herald, Volume XIIIC, Issue 14266, 4 August 1910, Page 6

INCOME TAX CASE.

CASE FOR APPELLANTS

Per Press Association

C'lliilSTCllL'ltCil, Ait». 3. The Income Tax ease was renewed tins morning. CSmirgi) iMtwrou, cross-examined by j\ir Stringer, said he had behoved Ins bystem ol making up income returns to be correct. It mis dunig his visit to England in fUUI that in- concluded that Jiowron Bros. <jf London were uufinancial mid their debt to the Christchurch house. ivas a. bad one.

-\1 r Striuyer said that the prosijcetiis ol' the proposed ct/wpany es>cimaLt-ti the prohtu ol' thu London lirm at £soUl> in I'JOli, £'24,000 in J. 903, and £IO,OOO jji nine months of 1904.

Mr Uowron suggested that these profit.'} were what would have been tnado il' thero had been r» interest and other charges. In making the return of 1.005 ho estimated the profits at £/jO,OOO or £60,000. Ho doduetud £37.-000, tho bad debt of the London firm. He, inider'stood that the firm's books were not a full account of its affairs, but ho had never looked into them. Towards the conclusion of his cross-examination witness interrupted a question v.th a request that Mr Tycrs, who was in Court, uliould not stare at him so persistently.

George John Smith, the next witness, said that ho had never kept books. Ho had keen employed by Bowron Bra?, a.s clerk before joining the firm, and had done work in tho office and outside. ,Vo balance-short tad Ut3on pvcpaivd. WhiMi lu l joined the firm Hownm's prat-tire in making returns lor taxation luicl been continued. As the ljus.iiics.s yrcw lie had Sit-tlo to do vit!i the firm's book.s, nnd hnd .spent a jjjood di-ul of time in Weill n gton as a member fit' the house. The accountant, Modlin, who had come out in J!)0-1, had said that the books were lint properly lii.pt, hut witness did not know until recently how bad they were. lie had never prepared n return without George Bowron's assistance. Modlin was engaged by the ILnudon firm, not the Christchurch hnn, and witness did not think that it was necessary to check his figures. He did not realise ihat they purported to be IWI accurate statement of the firm's income, and even lie did not believe them to bp correct. He was quite Satisfied from what i'.owron said that the London debt was bad. but he had not this information when the 1!J(I4 return was mad" up. I| e had no intention to evade taxation, lie Ihought that :1 taxation was naid on the full Piini. the spirit of the law if not (he letter would be complied with. Tn regard to Mr Tyer-'s figures he had been so upset by the charge of fraud that lie assumed the figures to be correct, and would have been tireparod to pav whether there was an error or not rather than .suffer the agony he bad experienced during the past few months'. He hnd never desired to deceive Mr Tycrs. He had gone Home to raise money on preferred stock and bad then presented to financiers drafts ol the tax returns to show tho firm's ineo'r.e.

C ? rHK-A.v,, m ;,,rvl bv Mr No;ir... Smith SjHf, ]»o Iwifl to nfiff/rt.:iin tho rtniount of thy ;md tho ninninit of l]j.p rIiiifnts for tlif 1 P tf riorl. Modlin's IJU'-O bulanoo-sliont liiul l>oon hnndcd to r Tvnrs as sc.n MS WltlHW- J't.MK"!!)!;('['"d as OXUstoiU'O. M' l imido h l '; oun <••! for tnxHt : on purposi. l :-'. In h-.d of inkin-r McdJ:n\s fimm-.s, Imt-mit-o i-o ivas following tlio custom of })n ; :v,fiu:< vosirs, T(> Mr I To h;id n p ver told Mr Ivors he always made up tnx r&ti i r n s. I hx c'Diiclutled the c;i.sr for the ,ii>pi'Unnt®. , Mr Strinpp" said Mr Tyei's would III:!' t>> rriticsp tlx* Ktutcmcnte put in in bv tlio nrmiinfmils. Sir I?n7yr(- Stcirf-, siiir! thi'f oti-clern-o would ri-,1 fVccl tl» J no." return. Mr lintel! (?nid ho would submit tl'.nt fchoHt'ji the return made hy appellants wna incorrect there was nocrhninnl in-

tent, and no intention to eviwle taxation.

'i.lie Chicl' Justice sai<l that tlie ro- | turn.hail allvrod. Tlio iigun*s re- [ quired by the statute were not put- in, ' and tin. 1 reason, arcordiiig lo Jjov.'ron, '.vas to cfivcr ux> the of a, debt owed bv tlie brotiiers in London. : That was kiKnviiijL'ly done to conceal : from tiu» C'onnni:-.sio]u j j- oi . 'I axes. '.Ciie evidence oi' ?v!r Sniiiti was 5 Ibe , .strongest Lbat had lnu-ii broii'.rlit loi'vxiird lor the deirm-e, ami seemed; to ' i>rovn tbe l)ona lides oi" the firm in re- ; to tax returns generally. i the mistake was tn:;de. ilio appeilaists j couid not he held guilty oE a deliber- ! n'te fraud. j Sir iiohcrt Stout said be coukl only . snv that tlio ovidenco of I\Jr Smitji . lnm deeply as to tlie bona- ; hdi's of appellants. ; ?»fr said tliat, in that case, be vus inclined to leave the case as it stood. Mr Sh-incror said be would bare hcx-n pleased if lie bad been ablo to modify the clinrjre in some way, but n retAirri bad been made. Mr Smith bad established his good faitli in regard to j the returns. Judgment- will be given at 2 p.m. to-morrow.