EVADING INCOME TAX.

Taranaki Daily News, 1 October 1921, Page 5

EVADING INCOME TAX.

THREE FIRMS FOUND GUILTY. METHOD REVEALED IN COURT. By Telegraph.—Press Association Auckland, Last Night. Three Waikato firms were charged at the Police Court to-day with having wilfully made false returns to the Income Tax Department. . In the case of House and Dakiag, ot Hamilton, drapers, Mr. Meredith (for the Crown) stated" that the method adopted was suppressing sales made in the business. Large sums which should have been shown to the credit of the business as sales were suppressed and reintroduced into the business through the private banking accounts of the main shareholders as loans. These were allotted to the shareholders, and the alleged loans used to pay share money. Bogus purchases from various firms were also shown, further reducing on paper the profits of the firm. The amount of income tax over four .years which was not paid .approximated £9OOO. The accused pleaded guilty to the four charges, and were fined the maximum of £lOO on each charge. Counsel stated that in preparing the balance-sheet the stock had been placed at a high figure of replacement values, which would have shown a profit that did not exist. To reduce this to a more proper figure the firm had entered fictitious purchases.

G. R. C. Calvert, of Cambridge, draper, was fined £lOO on each of three charges. His profits were reduced by suppressing sales and inflating purchases of goods. The income tax unpaid amounted to £2747.

Barton and Ross, of Hamilton, furnishers, were fined £lOO on each of three charges, involving a total of £2BOO income tax. Large amounts were shown as purchases when no goods were purchased. Counsel submitted that the action was done in error, and Ross believed the books were correct