Assessee set up a plant in the State of Gujarat in a most backward area. State of Gujarat had framed a Capital Investment Incentive Policy. As per said Policy, an assessee was entitled to collect and retain sales tax for 12 years. Total amount of tax which could be collected and retained was equal to capital investment. Assessee collected and retained sales tax under this scheme. Assessing Officer held that the sales tax subsidy received by assessee was a revenue receipt and included it in taxable income. Tribunal held that sales tax collected and retained by assessee was a capital receipt. High Court affirmed the order of the Tribunal. (AY. 2007-08)