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4. At the time of hearing before us, it is stated by the learned counsel that the assessee derives income from import of mobile phones from China and its sale in India. That during the year under consideration, total sales were at `62,91,41,642/-, out of which, high sea sales are at `59,11,29,517/- and the local sales at `3,80,12,124/-. That the assessee has a meager capital and its nature of business is that he enters into an agreement for purchase of mobile phones on credit basis from China and most of the times, the shipment itself is sold on the basis of high sea sales. The assessee recovers the sale consideration and then makes the payment to the China party against the purchases made by the assessee. That to expedite the transaction, the assessee, most of the times, receives the payment in cash from high sea sales. That the high sea sales are supported by the 3 ITA-6520/Del/2018 sale agreements which are duly approved by the custom authorities. That the delivery of goods from the customs is taken by those parties who have purchased the goods from the assessee by way of high sea sales. Import duty on such goods is paid by them. That the Assessing Officer has accepted the trading result. Thus, on one side the Assessing Officer accepted the sales as genuine by accepting the trading results as disclosed by the assessee and, on the other hand, held the high sea sales to be not genuine. Thus, there is apparent contradiction in the order of the Assessing Officer. Further, while making the addition, the Assessing Officer has mentioned that "the amount of Rs.59,11,29,517/- is hereby disallowed u/s 68 of the Act". He stated that the above finding of the Assessing Officer clearly indicates that the Assessing Officer was totally confused because disallowance can only be of expenditure and not the sales and moreover, for making any disallowance, Section 68 of the Act is not relevant. He stated that the Assessing Officer held the sales to be non- genuine merely on the ground that the notices issued under Section 133(6) were returned with the postal remarks "left or not existence". He stated that if a buyer of goods from the assessee is not found at his address after about two years of the transaction, it cannot be held that the transaction of sales was not genuine. That the purchase of goods is not doubted. If the Assessing Officer is of the opinion that there was no sale of goods, then the trading account of the assessee would be required to be recasted and such goods should have been considered in the assessee's stock. However, the Assessing Officer has accepted the trading result. He also stated that at the relevant time, there was no prohibition of the cash sales or cash receipt. Cash receipt has been prohibited under Section 269ST only with effect from 1st April, 2017. That as per Customs Act/Rules, each and every high sea sales agreement is to be approved by the custom authorities and in assessee's case also, each and every high sea sales agreement is duly 4 ITA-6520/Del/2018 approved by them and copies of all such approvals by the office of Commissioner of Customs are furnished in the paper book. He also stated that complete details of the buyer are to be given to the custom authorities and no high sea sales agreement can be approved unless the buyer has an importer exporter code. He stated that the assessee makes the high sea sales to mainly four buyers and all of them are having importer exporter code. The details with regard to such importer exporter code in respect of each buyer is furnished in the paper book. That the delivery of goods from the custom authorities is taken by those buyers after the payment of excise duty. The necessary document in this regard was also produced before the Assessing Officer and copy of the same is given in the assessee's paper book. He, therefore, stated that merely because the consideration of the high sea sales was received in cash, would be no ground for holding the sales to be non-genuine. He stated that Section 68 would be applicable in respect of cash credit. In this case, it is only the realisation of the sale consideration from the buyer of the goods and there is no cash credit in the assessee's books of account. In fact, as the goods were sold by the assessee, the buyer became the debtor of the assessee in respect of sale consideration and receipt of cash from them is the realisation of the sale consideration. The buyers were never the creditor of the assessee but they remained debtor till they made the payment of the value of the goods purchased by them. Thus, Section 68 is not at all applicable in this case. He also stated that on these facts, the decision of Hon'ble Apex Court in the case of Sumati Dayal Vs. CIT - [1995] 214 ITR 801 (SC) relied upon by the Assessing Officer is not applicable.

11. The Assessing Officer has doubted the genuineness of sales mainly on two grounds - (i) the buyer parties were not found available at the address given by them and (ii) they made most of the payment in cash for the goods purchased by them. However, we find that in the documents of custom authorities giving approval of high sea sales agreement, the name and address of the buyer of goods is mentioned and it is the same address which is given by the assessee to the income tax authorities. Therefore, it cannot be stated that such party was not available at the time when the assessee made the sales. Moreover, all the buyers of goods from high sea sales have importer exporter code. Copy of importer exporter code of all the buyers is placed in the paper book and we find that this 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 produced by the 10 ITA-6520/Del/2018 assessee i.e., approval of high sea sales by custom authorities and clearance of goods from customs after payment of import duty by the buyers on high sea sales basis proves the genuineness of sales beyond doubt.