JUDGMENT Iqbal Ahmed Ansari, J. 1. This is an appeal under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), against the order dated January 28, 2011, passed by the learned Income-tax Appellate Tribunal, Guwahati Bench (hereinafter referred to as "the learned Tribunal"), in Income-tax appeal (in short, "ITA") No. 131/Gau/2008 for the assessment year 2004-05. The appeal has been admitted on the following substantial question of law for determination and decision: Whether, in the facts and in the circumstances of the case, the learned Tribunal was justified in confirming the order dated February 21, 2008, of the learned Commissioner of Income-tax, Dibrugarh, in exercise of his powers under section 263 of the Income-tax Act, 1961? 2. We have heard Mr. G.N. Sahewalla, learned senior counsel for the assessee-appellant, and Mr. S. Sharma, learned counsel for the respondent. 3. The material facts giving rise to this appeal may in brief be set out as under: (i) The appellant is a company incorporated under the Companies Act, 1956, and is engaged in manufacture of coke, etc., in its industrial establishment, which has started operating with effect from September 11, 2000. For the assessment year 2004-05, the appellant company submitted its return of income, on November 1, 2004, showing its total income as nil and computed book profit of a sum of Rs. 89,55,710 in terms of the provisions of section 115JB of the Act and deposited a sum of Rs. 6,88,470 as tax payable thereon. In the return, so filed, the appellant company had sought for deduction of its claim of transport subsidy of a sum of Rs. 1,99,77,146. (ii) By order dated February 8, 2006, the Assessing Officer made his assessment order agreeing with the return of income and taxable liability as had been indicated in the appellant company's return by allowing deduction under section 80IA in respect of the amount, which had been, admittedly, received by the appellant company as transport subsidy. 1,99,77,146. (ii) By order dated February 8, 2006, the Assessing Officer made his assessment order agreeing with the return of income and taxable liability as had been indicated in the appellant company's return by allowing deduction under section 80IA in respect of the amount, which had been, admittedly, received by the appellant company as transport subsidy. (iii) The assessment order dated February 8, 2006, was interfered with on February 21, 2008, by the revisional authority by invoking its power under section 263 of the Act and, having examined the case of the appellant company as well as the assessment order, the revisional authority directed the Assessing Officer to make assessment order afresh on the ground that the transport subsidy, which had been received by the industrial undertaking of the appellant company, was not permissible to be deducted by taking recourse to section 80IA of the Act. As against the order dated February 21, 2008, passed by the revisional authority, the appellant company preferred an appeal which gave rise to I.T.A. No. 131/Gau/2008. (iv) In the course of time, by its order dated January 28, 2011, the learned Tribunal upheld the revisional order by taking the view that the amount received by the appellant company as transport subsidy was not deductible under section 80IA. Aggrieved by the decision of the learned Tribunal so reached this appeal has been preferred. 4. While considering the present appeal, it needs to be noted that a Division Bench of this court in a recent decision reached on May 29, 2013, in I.T.A. No. 7 of 2010 (CIT v. Meghalaya Steels Ltd.--since reported in [2013] 356 ITR 235 (Gauhati)) and other connected appeals has taken the view that the transport subsidy is aimed at reducing the cost of production of the industrial undertakings covered by the transport subsidy scheme and, thus, there is a first degree nexus between the transport subsidy, on the one hand, and the cost of production, on the other and when the cost is reduced it naturally helps in earning of profit and at times higher profits and such profits and gains ought to be treated to be profits and gains derived from, or derived by, the industrial undertaking concerned. The relevant observations, appearing in this regard, in Meghalaya Steels Ltd. [2013] 356 ITR 235 (Gauhati) read as under (pages 264, 268, 281): From the definition of raw materials and finished goods, embodied in the Transport Subsidy Scheme, 1971, and the details of the Scheme as contained, particularly, in sub-clause (iv) of clause 6 of the Scheme shows that in the case of North-Eastern Region, the Scheme promised that the transport subsidy would be given on the transport costs, between Siliguri and the location of the industrial unit concerned, on the raw materials actually required and used by the qualified industrial unit in its manufacturing programme as may have been approved by the Government concerned. The Transport Subsidy Scheme, 1971, also promised to make available transport subsidy on finished goods, actually produced by the industrial unit in accordance with the manufacturing programme approved by the Government concerned. What logically follows from the above discussion is that subsidy, on transportation of raw materials as well as finished goods, was promised to be made available to the industrial units concerned in a manner, which would directly affect the cost of production inasmuch as transportation subsidy, on the raw materials, was not meant to cover all the raw materials, but only that part or portion of the raw materials, which was actually required and used by an industrial unit in its manufacturing programme approved by the Government concerned and, similarly, transport subsidy, on the finished goods, too, help in reduction of the cost of manufacturing of the industrial unit concerned inasmuch as subsidy on transportation of finished goods was promised to be given on the finished goods actually produced by the industrial unit in accordance with the manufacturing programme approved by the Government concerned. When the transport subsidy so received both on the transportation of the raw materials as well as transportation of the finished goods, does go to reduce the cost of production of an industrial undertaking, the resultant effect of such a reduction, on the cost of production, would, obviously, help generate profits and, at times, higher profits.... Put shortly, there is an existence of direct nexus between transport subsidy, on the one hand, and the manufacturing/production activities of industrial undertaking, on the other, stands well established. Put shortly, there is an existence of direct nexus between transport subsidy, on the one hand, and the manufacturing/production activities of industrial undertaking, on the other, stands well established. Unless shown otherwise, the industrial undertakings, in the present set of appeals, which have been granted transport subsidy, are entitled to claim deductions in terms of the directions of the learned Tribunal.... What crystallizes from the above discussion is that the assessee's income, with the cost of production being reduced, because of the subsidies received, would obviously rise and, in consequence thereof, the profits earned, and the gains made by the industrial undertaking concerned would also increase. The profits, so increased, would be part of the gross total income of the assessee as defined under section 80B of the Act subject to deductions, as provided under Chapter VI-A of the Act, which includes deductions under section 80B as well as 80C. If an assessee becomes eligible for deduction under section 80IB or 80IC, he will not be liable to pay income-tax on the increased profit. Conversely put, the subsidies serve no purpose if he has to pay increased tax on the profits, which he has made because of the operational subsidies received by him. Situated thus, there can be no escape from the conclusion that the subsidies, in question, being operational in nature, help the assessee concerned earn profits and the profits, so earned, because of the subsidies, in question, are deductible in terms of the provisions of section 80IB of the Act. 5. In view of the decision so arrived at by this court in Meghalaya Steels Ltd. [2013] 356 ITR 235 (Gauhati) there can be no escape from the conclusion that the revisional authority had seriously erred in law in interfering with the assessment order dated February 8, 2006, on the ground that the transport subsidy, received by the industrial undertaking of the appellant company could not have been deducted by resorting to section 80IA. By its impugned order dated January 28, 2011, the learned Tribunal perpetuated the error by agreeing with the views expressed by the revisional authority that transport subsidy was not entitled to be deducted in terms of the provisions of section 80IA. 6. By its impugned order dated January 28, 2011, the learned Tribunal perpetuated the error by agreeing with the views expressed by the revisional authority that transport subsidy was not entitled to be deducted in terms of the provisions of section 80IA. 6. In the light of the decision reached in Meghalaya Steels Ltd. [2013] 356 ITR 235 (Gauhati) it is clear, if we may reiterate, that the appellant company was entitled to claim deduction under section 80IA of the amount which had been received by it in the form of transport subsidy and the act of not allowing deduction by the revisional authority and the learned Tribunal constitute grave error warranting interference by this court. 7. In the result and for the reasons discussed above, this appeal succeeds. The impugned order passed by the learned Tribunal on January 28, 2011, as well as the order dated February 21, 2008, passed by the revisional authority are hereby set aside and the assessment order dated February 8, 2006, passed by the Assessing Officer is hereby upheld. 8. With the above observations and directions, this appeal shall stand disposed of. No order as to costs. Disposed off