Deficiences In Income Tax Returns Alleged

Chronicle (Levin), 2 November 1949, Page 6

Deficiences In Income Tax Returns Alleged

WELLINGTON, Nov. 1. Eive charges alleging deficiencies in income tax returns of £10,159 between i942 and 1946 were preferred against Rotowax, Ltd., a printing and carton manufaeturing firm of Wellington, in the Magistrate's Court today. It was also aileged that £3458 11s 8d in tax had been avoided. Defendants pleaded not guilty to all charges through Mr W. E. Leicester, the proseeution being conducted by Mr W. H. Cunninghain. Mr II. J. Thompson, S.M., of Nelson, is presiding. The hearing is expected to last at least two days. Mr Cunningham, in outlining the case for th^ proseeution, said it would be shown in evidence that there had been systematic' suppression of ltems in the conipauy 's business. Ile said that lire salvage had realised £2168 7s 5d and suppressed saies £3289 4s lOd, lictitious purchases £771 and tliat machinery had been paid for out of ro venue and ho't from the company's ■•apitai. Mr Leicester said that while somof the ligures would be accepted ihe headihgs under which they caine and ihe construction that would be plaeeci •ipon the headings were not accepted by defendants. In respect of certain .tems it would be claimed that no tax .vas pavable, said Mr Leicester. In evidence Income Tax Inspector stevens said that on June 24, 1948, he nterviewed Taylor aliout the ' rent t'or in apartinent. above the business pre uises. Taylor said he had paid it iulo lis solicitor's trust account. Witness ex pressed surprise that the money was uot ecorded in the company's returns. Tay or said lie understood that had been lone and admitted that £822 had accru1 for rent 111 the trust account and ,ad eventuaily beeii paid iTito the di elders' second account. Rent received from New Zealand Labour Newspapers or other preunses was shown in tne reurns. A sale to Godfrey Phillips (N.Z. i .td., was a suppressed sale so far as ihe company was concerned but the proeeds appeared in the second account, .•ituess said. (Jross-examiued by Mr Leicester JSte- . ens said Taylor had agreed to items >eing listed in certain categories, but a luinber of items were grouped as saies . hicli had not been the siibject of indi- . iilual discussion. Taylor had frankiv aiswered all questions put to liim. The lirectors had niaintained throughoat liai paper which had beeii abandoned ifter the iiro had been processed by liem in their spare time and was not axable as profits of the company. When the Crown had iinished its evidence the case was adjourned till tomorrow when the defence will open.