Notional Interest on loan to AE assessable as income, if assessee having PE in India

Sabre Asia Pacific Pte. Ltd. Vs DCIT (ITAT Mumbai) The issue under consideration is whether notional interest income on the loan (interest-free) that was advanced by the assessee to its AE would be assessable as the income of the assessee which has a business connection or Permanent Establishment (PE) in India? ITAT states that in respect of such international transactions, the domestic bank rate would not be a sound basis and rather internationally accepted LIBOR rate would be the proper basis for benchmarking the ALP interest rate in respect of the said transactions. ITAT further find that t...