Buy-back of shares treated as capital receipt, attracting specific tax consequences for shareholders under income tax law.

Buy-back of shares is a company's purchase of its own shares under company law; amendments to income tax law excluded buy back proceeds from the dividend definition and made consideration on buy back taxable as capital gains under the specific buy back tax provision. Because shares are destroyed on buy back, no capital asset remains for further capital gains taxation, affecting the applicability of other capital gains provisions.

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