SEN, J. - (1.) THE Tribunal has forwarded the following two questions of law to this Court under S. 256 (1) of the IT Act, 1961 ('the Act') :- "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that Dewali Bohni, gifts and presents, Baksis paid by the assessee-company were not expenditure in the nature of entertainment expenditure within the meaning of S. 37 (2A) of the IT Act and in that view in deleting the disallowance made by the ITO. 2. Whether; on the facts and in the circumstance of the case and having regard to the fact that since the acquisition of the shares of Singapur Jute and Accessories (P) Ltd. In 1968 the aforesaid shares were shown in the assessee's balance sheet as its investment, the Tribunal was justified in law in holding that the loss of the aforesaid shares in 1977 should be treated as revenue loss instead of capital loss as held by the ITO?"
(2.) THIS reference relates to the asst. yrs. 1977-78 and 1978-79 for which the corresponding accounting period ended on 31st Dec., 1976 and 31st Dec., 1977, respectively. For the asst. yr. 1977-78, the assessee claimed sales promotion expenses amounting to Rs. 79,427 under:
(3.) THE ITO rejected the assessee's claim. On appeal, the CIT disallowed the assessee's claim in respect of entertainment expenses amounting to Rs. 27,542, Dewali Bohni of Rs. 21,554, Gift and presentation as also Baksis expenses. Other expenses were ultimately allowed by the CIT and such allowance was affirmed by the Tribunal.;