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TMI Blog2021 (2) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... . In these circumstances, the ITAT observed that the addition under Section 68 or 69C is contradictory to the stand taken while accepting the business income. No justification is offered by the Revenue for attracting section 68, on this count except for contending there is no net-effect on the business income , which is not the relevant yardstick. The amount in question, as noted above had already been charged to the income of the assessee. The question of allowability of the expenditure under section 69C has been restored to the file of the AO for fresh adjudication. Therefore, we find no reason to interfere with the findings of the ITAT on this aspect. The genuineness of the transactions has been accepted on the basis of documentary e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndors/manufacturers in China, and sells most of the phones to Indian buyers/suppliers as high-seas sales. Using the proceeds of sales which are paid in cash by the Indian buyers, the Assessee satisfies the credit extended by the Chinese sellers/manufacturers. On reaching Indian shores, the phones are collected by the high-seas sale purchasers. 5. In the financial year 2013-14, the Assessee generated a total sales revenue of ₹ 62,91,41,642/- out of which sales worth ₹ 59,11,29,517/- were from high-seas sales made to four Indian entities with the proceeds thereof being received in cash, and sales worth ₹ 3,80,12,124/- were from local sales. 6. On the case being selected for scrutiny assessment, the Assessing Officer ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails of the purchasers are unavailable with the purchasers being currently untraceable; and that there is a vast mismatch between the dates of sale and the date of deposit of cash into the bank accounts. Mr. Hossain further points out that there is absolutely no co-operation or assistance on the part of the Assessee. He submits that it rather strange that in the relevant financial year, the Assessee company generated revenue to the extent of ₹ 59,11,29,517/- which constituted more than 90% of the Company s revenues, from four entities it dealt with, and yet they were completely unaware of the whereabouts or contact details of any of these entities, and were unable to assist the Revenue in any manner whatsoever in tracing any of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Tribunal that the Assessee had proved the genuineness of high-sea sale beyond doubt was perverse and was arrived at without due consideration of the material facts mentioned by the AO in the Order? 10. On the aspect of additions being made under Section 68 of the Act, we notice that the ITAT was intrigued with the approach of the AO, and rightly so, in our view. The Assessee had worked out the business income after considering the sales and purchases of mobile phones which included the high-sea sales. In these circumstances, the ITAT observed that the addition under Section 68 or 69C is contradictory to the stand taken while accepting the business income. No justification is offered by the Revenue for attracting section 68, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is importer exporter code also gives the name and address of the parties to whom importer exporter code is given, its phone number, e-mail address, date of establishment banker details, name of the directors etc. That the delivery of goods is taken from the custom authorities by those buyers and not the Assessee. In the document for export clearance, the name of those buyers is mentioned as importer of the goods and not the Assessee. That the return of notices issued under Section 133(6) unserved by the postal authorities is certainly a ground for raising suspicion with regard to identity of the parties. However, it is not sufficient to reach to the conclusion that sales to those parties are not genuine. In fact the documentary evidences pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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