India - Selective Purchase through Buy-Back Deemed To Be a Colourable Device To Avoid Taxes
- P.R.K. Jhabakh
- Derivatives & Financial Instruments, 2012 (Volume 14), No 6
- 23 October 2012
The Authority for Advance Ruling has deemed the selective buy-back of shares from shareholders out of the company’s reserves which had accumulated due to the non-distribution of profits, to be a colourable device framed to avoid the payment of tax. The author considers this case and the reasons for its significance.