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2024 (1) TMI 71 - MADRAS HIGH COURTStay of all the recovery proceedings - addition of dividend as per section 2(22) as consideration paid by the appellant for purchase of its own shares from the shareholders - Assessee contented consideration paid by the appellant for purchase of its own shares in accordance with the Scheme, which is approved by this Court, is taxable only as capital gains in the hands of the shareholders under section 46A - subsequent amendment in section 115QA with effect from 01.06.2016 clearly indicates the legislative intent and taxation framework that purchase of its own shares under the Scheme by the appellant, was covered u/s 46A of the Act. Without properly appreciating the same, the Tribunal erred in treating the consideration paid by the appellant for purchase of its own shares from the shareholders as dividend as per section 2(22) of the Act and thus, held that the appellant is liable to pay u/s 115-O HELD THAT:- As in the interest of both the parties, is inclined to grant an order of interim stay, in the following terms: (i)The assessee shall make a payment of Rs. 1500 crores in cash or give a letter to the Bank to remit Rs. 1500 crores (Rupees One Thousand and Five Hundred Crores) to the credit of the respondent from the fixed deposits available, and furnish property security for the balance tax liability with interest and penalty, to the respondent, within a period of four weeks from the date of receipt of a copy of this order. (ii)On such payment and deposit of title deeds pertaining to the property, the respondent shall release the lien on the remaining fixed deposits lying in the Banks. (iii)In the event of default on the part of the appellant in complying with the aforesaid conditions, this order shall stand vacated automatically, without any further reference to this court; and it is also open to the Revenue to recover the tax liability from the appellant in the manner known to law. (iv)The substantial questions of law raised herein shall be considered at the time of final hearing of the appeal. (v)The memos filed by the respective parties, are taken on record.
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