Assessee-company made a buy-back of its own equity shares at a price lower than fair market value. Assessing Officer held that the buy-back resulted in acquisition of “property” and invoked section 56(2)(x) to tax the difference between fair market value and buy-back price. On appeal, the Commissioner (Appeals) held that the transaction was not a purchase of shares simpliciter, but buy-back of its own shares amounting to reduction of share capital and, therefore, provisions of section 56(2)(x) read with Rule 11UA were not applicable; addition was deleted. On second appeal, the Tribunal dismissed the Department’s appeal and affirmed the order of the Commissioner (Appeals).On appeal, the High Court held that buy-back of own shares under section 68 of the Companies Act, resulting in extinguishment of shares, cannot be regarded as purchase of property or acquisition of asset so as to attract section 56(2)(x). Accordingly, the view taken by the Assessing Officer treating such buy-back as generating profit/deemed profit was flawed and untenable in law. Order of Tribunal affirmed.  (AY. 2018-19)