Assessee-company had purchased its own shares from non-resident shareholders (CTS-USA, MRX-USA and CML-Mauritius) in accordance with ‘scheme of arrangement & compromise’ sanctioned by High Court as per provisions of sections 391-393 of Companies Act, 1956. Net effect of scheme was that post-sanction of scheme, entire shareholding of CTS-USA and MRX-USA, were purchased by assessee and shareholding percentage of CML-Mauritius was increased to 99.87 per cent of total paid up capital of assessee company. Assessing Officer held that consideration paid by assessee to its shareholders for purchase of its own shares was liable to tax as deemed dividend under section 2(22), and consequently, assessee was liable for payment of DDT under section 115-O. On appeal the Tribunal held that  th from above restructuring of shareholding pattern of assessee-company, it was clear that there was an artificial shifting of shareholding base from USA to Mauritius solely with aim of claiming DTAA benefits as per India-Mauritius DTAA wherein capital gains on transfer of equity shares was not taxable in India, as per Indian Tax Laws. Further, assessee had paid a sum of certain amount from paid up share capital, a sum of certain amount from general reserves and balance of sum of certain amount from retained earnings-Therefore, it was clear that there was a capital reduction and distribution out of accumulated profit of company to its shareholders. Accordingly  any distribution by a company of accumulated profits, if such distribution entails release by company to its shareholders all of or any part of asset of company would come within definition of ‘dividend’ under section 2(22). Consideration paid by assessee for purchase of its own shares in accordance with scheme sanctioned by High Court as per provisions of sections 391-393 of Companies Act, 1956, amounted to distribution of accumulated profits which entailed release of all or part of assets of a company on reduction of capital which attracted provisions of section 2(22)(d), and consequently, assessee was liable for payment of Dividend Distribution Tax under section 115-O. (AY. 2017-18)