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Tax on distributed income to share holders- Buy back of shares

QUERY: Are Provisions of section 50CA and section 56(2)(x) applicable to buyback of shares? i.e., is it possible to buy back the equity shares, at a price which is lower than the fair market value, without any incidence of tax?
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Section 115QA(1) starts with non-obstante clause. Therefore for buyback of shares, section 50CA or section 56(2)(x) will not apply. Section 115QA provides for levy of tax @ 20% on the difference between amount paid by the company for purchase of shares from its shareholders and the amount paid for subscription of the shares. The tax would be payable by the company on the distributed income. In the hands of shareholders the same shall be exempt under section 10(34A) of the Act, Rule 40BB of the Income tax Rules, 1962 provides for determination of fair market value of the shares of unlised company. So, the company will have to pay tax on the fair market value of shares as determined under the said rule.

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