#Investment vs Trading

CESTAT rules that when common input services are used for both taxable services and non-service investment activities like securities trading, proportionate reversal of CENVAT credit is mandatory. This clarifies a critical boundary in indirect tax compliance for financial institutions and corporate entities with dual-use expenditures, preventing unjustified credit claims on non-taxable activities.

ITAT Ahmedabad ruled that borrowing funds alone cannot reclassify share sales as business income; the decisive factors are the assessee's investment intent, holding duration, and consistent accounting treatment. This clarifies a critical boundary for individual investors and traders, protecting genuine long-term gains from being wrongly taxed as business profits.