K. Shivashankar Bhat, J.—The question referred to us under section 256 of the Income Tax Act, 1961 ("the Act"), read thus :

"(1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law while holding that when once a valid revised return was filed by the assessee, it completely effaces and obliterates the original return and, therefore, it is only the revised return that has to be taken into account for the purpose of making the assessment ?

(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that for purposes of allowing the entertainment expenses under section 37(2A) of the Income Tax Act, the profits and gains of the business should be taken to be the income without setting off the brought forward losses and unabsorbed depreciation of earlier years and right in granting relief or Rs. 25,000 to the assesses-company ?"

2. An answer to the second question would aid in solving the problem under the first question and, therefore, we proceed to consider the second question with reference to the facts.

3. The assessment year in question is 1979-80. The assessee claimed certain