CBDT clarifies that consideration received on Share Buy Back between the period 01.04.2000 till 31.05.2013 would be taxed as capital gains in the hands of the recipient in accordance with section 46A of the Act and no such amount shall be treated as dividend in view of provisions of section 2(22)(iv).
It is also clarified that as a matter of general principle, no fresh notice for assessment/reassessment/non-deduction of TDS at source shall be issued where share buy back has taken place prior to 01.06.2013 and the case is covered under section 46A read with section 2(22)(iv) of the Act. In cases where notices have already been issued and assessment proceedings are pending, tax authorities shall complete the assessment keeping in view the above legal position.
CBDT Circular No. 03/2016 dated February 26, 2016
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