In response to notice u/s 153A  the  assessee filed returns for earlier years in which it claimed set-off of brought forward losses . AO rejected assessee’s claim on ground that claim of various expenses in those returns was not verifiable  . CIT(A) allowed the claim of assessee. There was difference of opinion amongst members and the matter was referred to third member. The Question referred was “ whether on the facts and in the circumstances of the case and as per law , the  learned CIT(Appeals)  was justified in up holding the additions made by the AO for the years of completed assessments , which were not based on any incriminating material found during the course of search relating to such years and consequently denying the benefit of carry forward and set off of the resultant loss in subsequent year ? “

Third member held that since no incriminating material was found during course of search in respect of expenses claimed as deduction, assessee’s claim for set-off of brought forward loss was to be allowed .( AY. 2005 -06 , 2006 -07)