Water extraction of ethanol from petrol We have now 10% ethanol mixed petrol. Seller says that if this petrol comes in contact even 10 ml of water, all ethanol which is mixed in the petrol will be extracted by water, is it true?
Water and ethanol are highly "miscible"; a science term that means virtually any amount of water is fully soluble in ethanol, and vice-versa.  The next thing to consider is that ethanol and gasoline are quite miscible. Think of E-10 (10% ethanol) all the way to the E-85 some petrol engines are designed to function well on (with  some loss in power output).
However, water is very poorly soluble in pure gasoline.
So adding when water to E-10 the water mixes well with the ethanol, but the H2O/ethanol mix looses solubility rapidly as more water is added.
In theory, if you set up a separation flask, basically a clear glass vessel with a petcock at the very bottom, filled it at room temp with a gallon of E-10 and added ~3 tablespoons of water, shook it all up then let it settle to separate, you could drain away the bottom (denser) layer of liquid, which would be the water/ethanol mix, an leave you with ~0.9 gallons of relatively alcohol-free petrol. 
My final remark would be to ask why anyone would wish to do this as I can think of no reason in the world why someone would bother.