1. - The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur ("the Tribunal" herein), has referred the following question of law for the opinion of this court:

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the loss of Rs. 42,000 claimed by the assessee was a trading loss and not a speculation loss ?"

2. The assessee is a partnership concern. The assessment year under consideration is 1974-75. The relevant previous year ended on March 31, 1974. In the previous year, the assessee derived income from adat and dealing on own account in wool. The assessee's income in commission account was Rs. 1,23,222. A gross profit of Rs. 8,431 was shown from the dealings on account of sale of Rs. 11,93,226. The Income-tax Officer at the time of the scrutiny noticed a payment of Rs. 42,000 to: (1) M/s. Minerva Hosiery Mill Pvt. Ltd., and (1) M/s. Swadeshi Manufacturing Syndicate Pvt. Ltd. The amount of Rs. 42,000 represented the amount paid as damages for non-performance of contracts which are said to have been orally entered into with the aforesaid parties for supply of wool tops. The details of the aforesaid oral contracts were supplied b