FALSE TAX RETURNS

Wanganui Chronicle, Volume LXXXI, Issue 19050, 1 July 1924, Page 9

FALSE TAX RETURNS

PROFITS OF £16.000. BUTCHER FINED £2OO. In the Magistrate’s Court on Thursday last, before Mr. Wyvern Wilson, S.M,. Alfred William Grimmer, but eh er, Christchurch (Mr. W. J. Sim), pleaded not guilty to charges having made false returns under the Land and In come Tax Act, for the years ending March 31, 1920, 1921, 1922, and 1923. Mr. A. T. Donnelly, who appeared for the Commissioner of Taxes, said that the discrepancies between the true returns and the returns made by the defendant were very substantial indeed. The amount returned by the defendant in 1920 was £656, whereas tho true return was £2745. For the otlier years the returns made by the defendant were: 1921, £1053 instead of £3388; 1922, £2245 instead of £6209; 1923, £2944 instead of £3360. The discrepancies were made partly by the understatement of returns, but principally by the over-statement of an expenditure. There was an over-statement of the purchases the defendant in ids dealings. AlthFwdi he did not keep a complete set -or?"I»oks. the Income-Tax inspector had at the true figures from the passbook! and cheque book* The defendant Jkepft two banking accounts, one for bfusincss affairs, and the other one for private matters. From the businM account he made trans fers of profits to the private account, were so great that the could not but have known the returns were false. During had invested the sum and transferred to the £looo. In 1921 he transthe No. 1 account to the £3ooo, and the shortage in t^Bnefendant’s returns for that year wasWbout £2OOO. The shortage was most; glaring in 1922, when it was £4OOO, and the transfer from the No. 1 account to the No. 2 account was £7OOO. It might be said for defendant that he had got into a muddle, but the facts were such that the only | inference to draw was that a man could not make such returns to the Department and not know that they were false. This applied particularly to 1921 and 1922, when tho sums of £3OOO and £7OOO were transferred from the No. 1 account to the No. 2. It was said very often that the false returns were due to the defendant getting muddled, but it had always to bo borne in mind that such cases were characterised by the same principles; that the mistakes were against the Tax Department; the returns were never over-stated and nearly always understated. It was true that when an officer of the Department went to interview defendant he readily produced his books, but on the facts submitted it appeared impossible to escape the conclusion that the returns were falsely made; Mr. Sim submitted that on the fa?,ts there was evidence which should cause the Court to hestitate before finding Grimmer guilty of wilfully malting false returns. The verv facility with which the Department had been able to construct his true income was suf fieient to show that there was no wilful intent. Grimmer had transferred; £7OOO from one account to another, although he knew that tho Department would have an opportunity of review ing his position. It. would have been too brazen if it had been meant to defraud. It simply was a case of a layman stumbling in a return of figures which he was not competent to make. The case would be amply met by finding him guilty of negligently making the returns to which he pleaded guiltv. The Magistrate said that the defendant’s profits for four years amounted to £16,000, but he had state] in the income-tax return that it was £6BOO. Therefore it followed that for a period of four years the defend .nt had defrauded the country of a considerable amount of revenue. He end made himself liable for treble tax but that was not for him to consider Grimmer was convicted and fined £5O and costs on each charge.