Singhal Exim Pvt. Ltd. Vs ITO (ITAT Delhi)
The appeal before the ITAT Delhi concerned Assessment Year 2014-15 and primarily involved three issues: addition relating to alleged non-genuine high sea sales, addition under Section 68 in respect of unsecured loans from directors, and disallowance of miscellaneous expenses.
The assessee was engaged in the business of importing mobile phones from China and selling them in India. During the relevant year, it reported total sales of ₹62.91 crore, out of which ₹59.11 crore represented high sea sales. The Assessing Officer treated these high sea sales as non-genuine and made an addition of ₹59.11 crore under Section 68, alternatively under Section 69C, mainly because notices issued under Section 133(6) to four purchasers were returned unserved and a substantial portion of the sale consideration had been received in cash.
The assessee argued that all purchases and imports of mobile phones were genuine and fully supported by documentation. It produced high sea sale agreements, approvals from customs authorities, importer-exporter code details of the buyers, and documents showing that the buyers had taken delivery of the goods from customs and paid the applicable import duty. The assessee also contended that receipt of sale proceeds in cash was not prohibited during the relevant period and that Section 68 could not apply to recovery of sale consideration from debtors.
