Buyback Not Taxable as Property Acquisition Due to Share Extinguishment: Delhi HC

PCIT Vs Globe Capital Market Ltd. (Delhi High Court) In PCIT vs Globe Capital Market Ltd., the Delhi High Court examined whether buy-back of a company’s own shares at a price lower than their fair market value attracts taxation under Section 56(2)(x) of the Income Tax Act, 1961. The case arose from assessment proceedings for AY 2018–19, where the Assessing Officer (AO) noted that the assessee company had bought back 28,62,500 equity shares at ₹313.40 per share, while the fair market value (FMV) under Rule 11UA was ₹370.46 per share. The AO treated the difference of ₹57.06 per share, ...