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2022 (12) TMI 693 - ITAT DELHIAddition u/s 56(2)(viia) - buy back of its own shares by the assessee company as “property” in the hand within the meaning of Section 56(2)(viia) - assessee company has bought back its own shares under buy back scheme and the same has to be extinguished by reducing the paid-up capital of the assessee company - HELD THAT:-Respectfully following the order of M/s Vohra Financial Services Pvt. Ltd. [2018 (7) TMI 64 - ITAT MUMBAI]. We hold that the provisions of section 56(2)(viia) of the Act are applicable only in the cases where the purchased share become property in the hands of the buyer company and, if the shares are of any other company. In the present case, the assessee purchased its own shares under buyback scheme, and, as per the submissions made by the ld. Counsel at the bar, the same has been extinguished by reducing the paid up capital of the assessee company. The fact remains that the factum of extinguishment of the purchased shares by reducing the paid up capital of the assessee company has not been examined and verified at the level of the AO. Therefore, the issue is restored to the file of the AO for a limited purpose of examining and verifying the fact of extinguishment of shares by reducing the paid-up capital of the assessee in the accounts of the assessee. AO is directed to delete the addition in case the said fact is found to be correct - Appeal filed by the Revenue is allowed for the limited purpose of verification.
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