COMPANY FINED £900

Wanganui Chronicle, Volume 88, Issue 194, 15 August 1944, Page 5

COMPANY FINED £900

FALSE TAX RETURNS (P.A.) Dunedin, Aug. 14. The New Zealand Fur Company, Limited, in the Police Court this morning, was fined £lOO on each of ! four charges of wilfully making false returns of income and £lOO on each ,of five charges of making erroneous I returns to the Sales Tax Department. The prosecution said it was the worst case of its kind to come before the New Zealand courts. "This case is one of wilful evasion, one of the worst of its kind in recent years,” said Mr. F. B. Adams for the Crown. Over a period of seven years returns of income were made of only £BS63, whereas the return should have been £28.308. The amount of additional income tax that would now be chargeable against the company was estimated at £6396 over a period of seven years and £1053 for Social and National Security taxes for the same period, and the personal tax return ut Leon Cohen, as holder of the company’s shares would be affected to the extent of about £l2OB. In addition sales tax now assessed, of which payment had already been made, amounted to £1839, so that the total tax deficiency exceeded £lO,OOO. Mr. Adams said Cohen had Informed the Customs Department that he had a large reserve stock, and at the end of 1943 It was found that he had stock in hand valued at £17,252, whereas at the end of the previous year he had declared only £4325. Thif’e was a time when a trading concern could create stock reserves without tax evasions, but the position had now been changed. Mr. J. B. Thomson, for the defence, said so far as the sales tax was concerned the offence was due to undercosting of the goods. Dealingjwith the income tax cases, counsel said that so far as the secret stock was concerned defendant had merely carried on a practice which had been oermitted nrior to 1939 but became illegal in the amended Act of 1933. The business in which the defendant com pan v was engaged was a most speculative one and defendant was anxious to build ud a reserve to meet anv contingencies. The magistrate said that there had been a deliberate false return so far as income tax was concerned for at least th? years 1939 to 1942 and erroneous statements of sales tax for these years. “There is no possible excuse for the notions of tho defendant comnanv,” the magistrate added, “and it deserves no consideration whatsoever. I i would b? failinn- in mv duty not to 1 impose the maximum penalty.”