Held that a business activity carried on by corporation is not business activity on the State Departmentally, or it is a business activity carried on by a State through its agents appointed in that behalf. The contention that the assessee is performing sovereign function of the Government and since the assesee cannot be considered to be part of Sate Government and since the private parties could also carry on the activity of Rail transport, the contention is rejected. Receipt was given by the State Government to meet the capital cost of the assesseee company. It is to be capital receipt and cannot be taxed. Issue is remitted to the Assessing Officer for fresh consideration. Interest earned from fixed deposits of surplus funds after commencement is taxable though it was received for expansion of the project. (AY. 2011-12 to 2015-16 )