The £30,000 received by Mr Ray Burke from JMSE in 1989 was incorrectly treated as a deduction for tax in Murphy company accounts, the Flood tribunal heard yesterday.
"At the time of the preparation of the accounts and the payment of the tax due, he [Mr John Bates, the company auditor] did benefit [on behalf of the company] from labelling it as enhancement expenditure," Mr Aiden Walsh SC, for Mr Burke, said.
Mr Roger Copsey, the former JMSE financial director, did not think the £30,000 payment was labelled in the Murphy books as land "enhancement" and "planning permission" because it was an allowable deduction for tax.
"His purpose for putting it in there was not in fact to get an allowance for tax. It was because he thought it was enhancement expenditure," Mr Copsey said.
"A couple of years later, he corrected himself and wrote to the Revenue. He paid interest," Mr Copsey added.
Mr Walsh also questioned Mr Copsey on the actual enhancement to the lands in question, as distinct from its treatment in the accounts. He put it to Mr Copsey that "there was no enhancement of any of the lands between 1989 and September 1991". Mr Copsey replied that up to the period he was there, August 1990, there was absolutely no enhancement of the land's value.
The Murphys bought the land at agricultural prices, with the long-term objective of getting planning permission, Mr Copsey said. However, it was later sold to the Baileys at agricultural prices, and the majority of the land still is agricultural, Mr Walsh said.
Mr Walsh also brought Mr Copsey through evidence showing that Mr Burke received £30,000, and not other amounts alluded to by Mr Gogarty at different times.
Mr Copsey agreed with Mr Walsh that from the information gleaned from Mr McArdle's records regarding the payment in June 1989, and the Murphy accounts, the amount reflected is £30,000, always was £30,000 and never was anything but £30,000.