Set-off of brought forward losses required fresh verification before rectification, with the matter restored for reconsideration.

Rectification under section 154 was based on an audit objection concerning the set-off of brought forward losses in computing current income. The assessee contended that sufficient carried-forward losses were available, and the correctness of the available losses had not been examined on merits. As verification of the loss balance was necessary, the matter was restored for fresh examination and for allowing the correct set-off of brought forward losses in accordance with law.

---

---

Issues: Whether the assessee was entitled to fresh verification of the set-off of brought forward losses while computing the current year's total income under the rectification order.

Analysis: The addition arose from a rectification under section 154 on the basis of an audit objection regarding alleged wrong allowance of set-off of brought forward losses. The assessee asserted that sufficient carried-forward losses were available and that the issue had not been examined on merits by the first appellate authority. As the correctness of the available brought-forward losses required verification, the matter needed reconsideration in accordance with law.

Conclusion: The issue was restored to the Assessing Officer for fresh examination and for allowing the correct set-off of brought forward losses while computing the total income.

---