As for the years 2015 to 2017, it is indeed possible to use data from the list of rents compiled by the defendant and from specific information that arose during the course of the evidence from contracts and invoices. However, these are very partial data. Only in the minority of cases are there contracts and invoices, and a number of additional cases arose in the framework of the testimonies (such as the additional tenants in 2018). The conclusion in this regard is that it is not possible to determine the amount of income from the motel in the years 2015-2017.
As already noted, in accordance with the case law, when it is not possible to do so, the court is not obligated to determine an exact amount. This is the case before us, in which there is difficulty in determining the scope of income from the motel that was not reported in the years 2015-2017.
Apartment in Pardes Hanna
- The income from renting the apartment in Pardes Hanna is attributed to the defendant only, between the years 2013-2018. The accuser attributes to the defendant an income of NIS 30,000 per year in the years 2013-2017 (based on a monthly rent of NIS 2,500) and NIS 10,000 in 2018, until the end of the lease in May 2018, and business restrictions on income in the amount of NIS 160,000 that was not reported.
- In his testimony, the defendant confirmed that the apartment in Pardes Hanna had already been rented in 2013 for NIS 2,500 per month. The defendant claimed that he had reported this to the accountant, who told him that he did not have to pay tax on this income and refrained from recording the income in the defendants' reports.
In the defense summaries, it was claimed that the income was not reported because it did not amount to the rent required for reporting by law. In this regard, CPA Dotan rejected the defense's claim that he told the defendants that they were exempt from reporting about the apartment. As I noted above, CPA Dotan's testimony is reliable to me. I will note that CPA Dotan testified that he reported about the apartment in Pardes Hanna in 2017 when he was provided with information about it, but no additional information was brought in this regard, and the defense's argument is that no report was provided to the authorities in respect of this apartment.
- There is no dispute that the rent was transferred to the defendant's account. I see no reason to relate to the various arguments that have arisen regarding the registration of ownership of the apartment, since according to case law, a rental income producer does not have to be the registered owner of the property (see Aharon Namdar, Income Tax [Foundations and Principles] (2013), 206-207, criminal file). In these circumstances, the defendant is considered to have derived income from the rent. The manner in which the defendant chose to make use of this income – whether by transferring it to his daughter or in any other way – does not raise or lower this matter.
- As for the lease period, the defendant claimed in his testimony that he had rented the apartment in Pardes Hanna until August 3, 2017 (and not until May 2018, as the accuser claimed), and that at the beginning of 2018 his mother moved into the apartment. However, as noted above, according to the defendant's bank account, until May 2018, the tenant transferred the exact sum of NIS 2,500 every month. The date on which the transfers were stopped supports the accuser's position, and the very fact that the exact amount was transferred every month contradicts the defendant's claim that the tenant did not transfer the payment on time, and as a result, a debt was created. According to the lease as well, the date of termination of the lease was set for May 1, 2018.
- The defendant omitted income from renting the apartment in Pardes Hanna and engaged in fraud, deception and deception. He was unable to point to a reasonable explanation for the failure to report on his part, and therefore the mental element of intention to evade tax evasion also exists in the matter of renting the apartment in Pardes Hanna. In addition, failure to maintain a ledger, without a reasonable explanation, also relates to his aforesaid income.
Income from bribery and theft by a public servant
- In accordance with my determinations in Charges Nos. 1-12 and in Charge 14, the defendant was convicted of bringing in the sum of NIS 347,538 as a result of the offenses of taking bribes and theft by a public servant. This sum is NIS 70,000 lower than what is alleged in the indictment and in the accuser's summaries (NIS 417,538), in view of the defendant's partial acquittal of Charge No. 4. According to case law, there is tax liability even when the source of the income stemmed from illegal activity (see, for example, Criminal Appeal 7593/08 Ritblatt v. State of Israel (September 1, 2009, para. 62; Criminal Appeal 5136/22 Locker v. State of Israel (November 10, 2024, para. 430)). It is clear that with respect to the non-reporting of these incomes, there was an intention to evade tax payment.
In addition, failure to maintain a ledger, without a reasonable explanation, also relates to the defendant's income.