M
J
Bonner:—The
appellant
appeals
from
assessments
of
income
tax
for
the
1974,
1975
and
1976
taxation
years.
The
appellant
was,
during
those
years,
a
dairy
farmer
who
computed
his
income
on
a
cash
basis.
He
also
had
a
full-time
job.
At
the
hearing
of
these
appeals
two
items
were
in
issue.
The
first
is
a
deduction
claimed
in
1974
for
cattle
purchases.
The
amounts
claimed
represent
$200
per
month
paid
to
creditors,
I
believe
a
bank
and
a
credit
union,
which
creditors
had
loaned
money
to
the
appellant
to
finance
cattle
purchases
made
in
earlier
years.
Although
the
cost
of
purchases
of
inventory
is
deductible,
in
the
case
of
a
person
who
computes
income
on
a
cash
basis
the
year
in
which
the
purchase
is
made
is
the
year
of
deduction
and
not
later
years
when
borrowed
money
used
to
make
the
purchase
is
repaid.
The
appellant
is
therefore
not
entitled
to
this
item.
The
second
item
in
dispute
is
deductions
claimed
in
each
of
the
three
years
in
issue
for
the
cost
of
feed,
salt
and
concentrate
and
for
casual
labour.
Fifty
per
cent
only
of
these
amounts
was
allowed
on
assessment.
The
reason
for
the
disallowance
was
that
the
appellant
produced
no
vouchers
or
records
to
the
respondent’s
officials.
Mr
Walker,
the
respondent’s
assessor
who
was
responsible
for
the
audit
and
assessment,
testified
that
he
allowed
50%
of
the
amounts
claimed
because
it
seemed
to
him
to
be
a
reasonable
allowance
for
costs
actually
incurred.
The
appellant’s
evidence
was
that
the
amounts
claimed
in
the
returns
of
income
were
actual
costs
which
had
been
recorded
by
him
in
a
scribbler,
which
scribbler
was
transmitted
to
the
accountants
who
prepared
his
returns
of
income.
The
appellant
testified
that
such
scribbler
plus
vouchers
and
receipts
that
he
had
were
destroyed
by
a
leak
in
the
roof
of
that
part
of
the
house
where
they
were
kept.
That
destruction
occurred
after
the
preparation
of
the
returns
in
question.
I
have
concluded
that
the
appellant
has
failed
to
establish,
on
the
balance
of
probabilities,
that
he
had
expended
the
amounts
claimed
or
any
amounts
in
excess
of
those
allowed.
I
reach
this
conclusion
on
three
principal
bases:
(a)
The
amounts
claimed
did
not
decline
despite
a
decline
in
the
number
of
cattle
held
over
the
period
in
question
and
one
would
have
expected,
where
business
was
being
wound
down
and
the
number
of
cattle
maintained
was
declining,
that
the
costs
would
also
decline.
A
simple
business
judgment
would
indicate
the
likelihood
of
such
result.
(b)
The
appellant
failed
to
call
any
of
the
suppliers
to
give
evidence
despite
the
fact
that
a
few
major
suppliers
appeared
to
have
accounted
for
the
largest
part
of
the
expenditures
in
question;
and
(c)
I
entertain
some
doubt
as
to
the
appellant’s
devotion
to
accuracy
in
matters
where
income
tax
is
concerned.
The
appellant
says
that
he
did
not
claim
for
purchases
made
on
a
pay-cash-get-no-receipt
basis
from
persons
whom
he
suspected
were
trying
to
beat
the
income
tax.
There
is
reason
in
my
mind
to
doubt
the
accuracy
of
the
uncorroborated
evidence
of
one
who
cooperates
in
this
way
with
tax
evaders.
For
the
foregoing
reasons
the
appeals
are
dismissed.
Appeals
dismissed.
Email this Content