1. - This income-tax reference is directed against the order dated 20th December, 1980 passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (in short 'Tribunal') for the asst. yr. 1974-75. The Tribunal referred following questions of law:

"(1) Whether on the facts and in the circumstance of the case, the Tribunal was justified in deleting the disallowance of Rs. 4,250 made by the ITO on account of entertainment expenditure?

(2) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the receipt of Rs. 1,67,189 is to be treated as 'business income' instead of income from speculation business.

2. The facts, necessary for disposal of this reference, are that the respondent-assessee a limited company was carrying on the business of production of vegetable ghee and oil and simultaneously also manufacturing its own commodities out of tin plates. A return was submitted by the respondent-assessee declaring a loss of Rs. 44,05,060 on 31st Aug., 1974 which was revised on 30th Oct., 1976 declaring a loss of Rs. 44,05,888. Notices were issued and during the course of hearing the AO required details on various issues on which the r