Search Results For: 46A

DATE: February 12, 2016 (Date of pronouncement)
DATE: February 13, 2016 (Date of publication)
AY: 2011-12
FILE: Click here to view full post with file download link
S. 2(22)(d)/ 46A: A buyback of shares u/s 77A of the Companies Act is not a reduction of capital u/s 100 - 104 of that Act. A buyback cannot be regarded as a "colourable transaction" and cannot be assessed as "deemed dividend" u/s 2(22)(d). The capital gains on buy-back are exempt under the India-Mauritius DTAA

Section 100-105 r.w.s. 391of the CA deal with reduction of capital and obtaining permission of the Court. Clearly, both deal with different situations. The Hon’ble Jurisdictional High Court has dealt with the schemes of buyback of shares and reduction of capital in the case of Capgemini India Private Limited (Company Scheme Petition No.434 of 2014 dated 28.04.2015) where it was held that it is open to a company to buy back its own shares by following the procedure prescribed under section 77A/Section 68 or by following the procedure prescribed under section 391 read with Sections 100 to 104 of the 1956, Act. The observations of the Hon’ble Court does not leave any doubt that buyback of shares cannot be equated with reduction of capital