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The Tax Publishers Siemens Nixdorf Informations Systeme GmbH v. Dy. DIT [IT Appeal No. 3833 (Mum.) of 2011, dt. 31-3-2016] : 2016 TaxPub(DT) 1760 (Mum-Trib) Transfer of loan to another entity whether short term capital loss? *Facts:* Assessee non-resident had lent money to Siemens Nixdorf Information systems India Ltd (SNISL) amounting to EUR 90,00,000. The said company SNISL ran into financial difficulties, thus arising out of a valuation by ILFS the said loan was transferred to Siemens AG for EUR 731,000. The assessee claimed the assignment of debt as a capital loss arising out of a capital asset and filed return for the first time to claim the capital loss. The assessing officer and Commissioner (Appeals) disallowed the loss holding it to be a sham transaction. On further appeal: Held the loan was a capital asset as per section 2(14) and since a capital asset, the transfer to Siemens AG was a transfer and thus was entitled to the capital loss.

The Tax Publishers

Siemens Nixdorf Informations Systeme GmbH v. Dy. DIT [IT Appeal No. 3833 (Mum.) of 2011, dt. 31-3-2016] : 2016 TaxPub(DT) 1760 (Mum-Trib)

Transfer of loan to another entity whether short term capital loss?

Facts:

Assessee non-resident had lent money to Siemens Nixdorf Information systems India Ltd (SNISL) amounting to EUR 90,00,000. The said company SNISL ran into financial difficulties, thus arising out of a valuation by ILFS the said loan was transferred to Siemens AG for EUR 731,000. The assessee claimed the assignment of debt as a capital loss arising out of a capital asset and filed return for the first time to claim the capital loss. The assessing officer and Commissioner (Appeals) disallowed the loss holding it to be a sham transaction. On further appeal:

Held the loan was a capital asset as per section 2(14) and since a capital asset, the transfer to Siemens AG was a transfer and thus was entitled to the capital loss.