In Vora Financial Services Pvt Ltd Vs ACIT (ITAT Mumbai) at para no 32 observed as under:<\/p>\n
Accordingly we are of the view that the provision of section 56(2)(viia) should be applicable only in the case of where the receipt of share becomes property in the hands of recipient and the shares shall become property of the receipt only it is is shares of any other company, In the instant case the assesses herein has purchased its own shares under the buy back scheme and same has been extinguished by reducing the capital and hence the test of becoming property and share of any other company fails in this case. Accordingly we are of the view that the tax authorities are not justified in invoking the provision of section 56(2) (viia) for buy back of own shares.<\/p>\n
query-In this case the difference per share was small Rs 6.80 (Rs 32.8minues 26). There was no valuation rules. The assess had given its own valuation report which was near Rs 26.\u00a0 This case was for Assessment year 2014-15 when this section was applicable to only Individual and HUF. On buyback the shares become property of Company and then same is cancelled \/ extinguishes.<\/strong><\/p>\n Please confirm that after the introduction of section 56(2)(10 ) to company this judgment holds good. Is there any adverse judgment on this issue. Any reference is filed against the above judgment<\/p>\n","protected":false},"comment_status":"open","ping_status":"closed","template":"","qa_expert":[33],"qa_category":[23],"qa_tag":[142,24],"class_list":["post-25529","qa","type-qa","status-publish","hentry","qa_expert-advocate-shashi-ashok-bekal","qa_category-income-tax","qa_tag-buy-back-of-shares","qa_tag-capital-gains"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa\/25529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/qa"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=25529"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=25529"}],"wp:term":[{"taxonomy":"qa_expert","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_expert?post=25529"},{"taxonomy":"qa_category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_category?post=25529"},{"taxonomy":"qa_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_tag?post=25529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}