Judgment :- (Prayer: Appeal filed under Section 260-A of the Income Tax Act 1961 against the of the Income Tax Appellate Tribunal Madras 'D' Bench dated 29.3.2005 in I.T.A.No.1023/Mds/1998.) P.D. Dinakaran, J. Heard. The above appeal is directed against the order of the Income Tax Appellate Tribunal Madras Bench "D" dated 29.3.2005 in I.T.A.No.1023/Mds/1998. 2. The facts in brief are: The assessee is a public limited company engaged in the business of manufacture of paper. For the assessment year 1993-94, the assessee filed a return of income and claimed set off of brought forward investment allowance pertaining to the assessment years 1987-88, 89-90 and 90-91 amounting in all to Rs.1.15 crores. The assessing officer, by order dated 31.03.1997, passed under Section 143(3) of the Act, initially allowed a set off amount to a sum of Rs.98.27 lakhs. In the subsequent rectification order passed under Section 154 of the Act, the amount of carried forward and set off of investment allowance was varied to Rs.98.59 lakhs. But, in the subsequent order dated 12.10.2000 passed under Section 154 of the Act, the assessing officer, withdrew the set off of brought forward investment allowance for the earlier years on the ground that the assessee had not fulfilled the statutory requirement of creating an investment allowance reserve either in the year of purchase of the asset or in the year in which it is absorbed. Aggrieved by the said order, the assessee filed appeals before the CIT (Appeals). The Commissioner of Income Tax (appeals), by an order dated 31.3.1998, set aside the assessment order and directed the assessing officer to afford an opportunity to the assessee to credit the required amount in the investment allowance reserve account in accordance with explanation under Section 32A(4) of the Act. The Commissioner of Income Tax (Appeals), in respect of the dispute regarding quantification of benefit u/s 80 HHC, found that contentious issues relating to deduction u/s80 HHC cannot be considered in Sec.154 and if the appellant is entitled to a deduction, the same should be allowed as per the claim filed. The Appellate Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the appeal filed by the Revenue. 3. Aggrieved by the said order of the appellate Tribunal, the Revenue has filed the above appeal by raising the following substantial questions of law:- 1. The Appellate Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the appeal filed by the Revenue. 3. Aggrieved by the said order of the appellate Tribunal, the Revenue has filed the above appeal by raising the following substantial questions of law:- 1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the assessee ought to be given an opportunity to create an increased investment allowance reserve, when it had not even created a reserve sufficient to cover the claim made in its return? 2. Whether on the facts and circumstances of the case the Tribunal was right in holding that the assessee should be granted the benefit of 80HHC as per its claim, as the quantification could not be considered u/s.154? 4. As far as the first question is concerned, it is not in dispute that the issue is relating to the assessment year 91-92, but the assessee claimed deduction from its current year income, of carried forward investment allowance in priority over the carried forward depreciation. As the claim of the assessee has been allowed, no portion of carried forward investment allowance would have been available to deduction in the current year. That apart, in view of the circular of the Central Board of Direct Taxes relating to development rebate, the Income-tax Officer should condone the genuine deficiencies subject to the assessee's making good the amount through creation of a adequate additional reserve. The explanation to Section 32A(4) of the Act also contemplates that an opportunity shall be allowed to the assessee to create investment allowance reserve account by the requisite amount. The explanation to Section 32A(4) of the Act also contemplates that an opportunity shall be allowed to the assessee to create investment allowance reserve account by the requisite amount. Explanation to Section 32A(4) reads as follows: "Explanation to Section 32A(4)- Where the amount debited to the profit and loss account and credited to the Investment Allowance Reserve Account under this sub-section not less than the amount required to be so credited on the basis of the amount of deduction in respect of investment allowance claimed in the return made by the assessee under Section 139, but a higher deduction in respect of the investment allowance is admissible on the basis of the total income as proposed to be computed by the Assessing Officer under section 143, the Assessing Officer shall, by notice in writing in this behalf, allow the assessee an opportunity to credit within the time specified in the notice or within such further time as the Assessing Officer may allow, a further amount to the Investment Allowance Reserve Account out of the profits and gains of the previous year in which such notice is served on the assessee or of the immediately preceding previous year, if the accounts for that year have not been made up; and, if the assessee credits any further amount to such account within the time aforesaid, the amount so credited shall be deemed to have been credited to the Investment Allowance Reserve Account of the previous year in which the deduction is admissible and such amount shall not be taken into account in determining the adequacy of the reserve required to be created by the assessee in respect of the previous year in which such further credit is made;" Hence, the Commissioner, as confirmed by the Tribunal, directed the assessing officer to allow the appellant an opportunity to credit the investment allowance reserve account by the requisite amount in compliance with the said circular and as contemplated under the explanation to Section 32A(4) of the Act, and if the assessee complies with such condition, directed the assessing officer to allow the investment allowance. If that be so, since the directions of the Commissioner as well as the Tribunal are strictly in compliance with the Board circular and the Explanation to Section 32A(4) of the Act, we answer the first question in the affirmative, against the Revenue and in favour of the assessee. 5. If that be so, since the directions of the Commissioner as well as the Tribunal are strictly in compliance with the Board circular and the Explanation to Section 32A(4) of the Act, we answer the first question in the affirmative, against the Revenue and in favour of the assessee. 5. With regard to the second question that the assessee should be granted the benefit of 80HHC as per its claim, the Commissioner of Income Tax (Appeals) and the Tribunal, held that due to short deduction of brought forward investment allowance, there is a profit and the claim of deduction under Sec.80HHC of the Act will be academic and therefore, the issue with regard to the deduction under Sec.80HHC cannot be considered under Sec.154 of the Act, as the same is debatable. 6. This Court in the decision rendered in THE COMMISSIONER OF INCOME TAX VS. NAMEEL LEATHERS AND UPPERS (273 ITR 350) held that even though losses should be deducted from the profit available for the purpose of computation of relief under Section 80HHC of the Income Tax Act, 1961, since the question of relief under Section 80HHC of the Act is a debatable issue which does not fall within the purview of prima facie adjustment under Section 143(1)(a) of the Act and could be taken up in regular assessment under Section 143(3) of the Act, the action of the Revenue invoking section 154 of the Act to rectify the intimation under Section 143(1)(a) of the Act was not valid. 7. In view of the above discussion, we do not find any error in the order of the Tribunal and no question of law much less a substantial question of law arise for consideration of this Court. Hence, the appeal is dismissed.