INCOME TAX CASE.

Taranaki Daily News, Volume LIII, Issue 100, 5 August 1910, Page 5

INCOME TAX CASE.

APPEAL DISMISSED.

REMARKS BY THE JUDGES. '.' w ffr By Telegraph.—Press Association. Christchurch, Last Night. Tito Chief Justice and Justice Sim, in, giving judgment in the income tax case against Bowron Bros., stated it bad bees proved th/t the firm's income tax returns dated November 8, 1900, were inaccurate, and were knowingly made inaccurate in order to cover a certain transaction which arose through the Arm's desire to forgive a debt doe by Bowron Bros., London, and deliberately made up figures to show the profit let* by the deduction of what they termed a bad debt. The judgment continues: "Inaccuracy appears not only from the evidence of Tyres, which he collected from books of the Arm, but also from the balance-sheet which was prepared by the auditor of the firm for the period to which the . return refers. It may be pointed otrt that the sales shown in the return amounted to £305,749, while the sake shown in the balance-sheet prepared by the auditor of the firm show £978,714.' Stock in hand amounted to £94347, according to auditor's account, while in the return it was stated to be £72#52« Then the stock in hand at the commencement of the twelve months was shown in the auditor's account as £84,872» ? whilst in the statement it appears afl £71,960. The purchase of stock also 1 differed in the auditor's account It amounts to £297.605, whilst in the return it is shown at £242,27.5. Then the labour and material account as shown in auditor's account is £27,028, whilst in the return it is shown aa £32,538. The whole returns are there* ' fore wrong. It is unnecessary to ppini out how the conclusion, of these two accounts differ, but it may be stated 'that/ the profit and loss account prepared by''. the auditor shows profits at £52,418,,' whilst according to the return they are only £18,836. How then has this discrepancy arisen? It is admitted by the , appellants that it arose through thefc - desiring to forgive a debt due by Bow-'. Ron Bros., of London, to the firm in Christchurch. To show this as a bads- ' debt is, of course, entirely contrary to.'* 1 the requirements of the law, which re«# quires that bad debts should be in special and separate lists, and ordin-' / ary bad debts are so placed by them in' their return. They claim a reduction of! * £2007 of bad debts. It is riot dear to"H*« the court that this debt of £37,768/ ', which they say was deducted, was W'" effect a bad debt. From the transacUon % as explained it seems more likely a gift from the Christchurch firm to the firm in London." After stating that the amount Would be assessed not by their honors, they stated:—"We thinkthat all that is necessary for us to say is that the appeal must be dismissed with costs, and the conviction affirmed. We may add that we think it is to be regretted that the evidence given by Mr. Smith was* not' ~ produced in the court below, ar#that » the defence raised in court belriv of a >' debt of £108,0D6 by waj»relied on. We fix the costs at £2O with w J R B for ,. each *»>y beyond the flrst, that is making it in all £6l, with witnesses expenses and other disbursements. If there are any of these ex- : penses and disbursements, thev are to be fixed by the registrar. ' / '