AVR Freaks

I am trying to make an i2c keypad by using atmega8 (master receive and slave transmit mode). here is the master code

#define F_CPU 1000000UL
#include <avr/io.h>
#include <util/delay.h>
void I2C_INIT()
{
	TWBR = 0x00; //CLEAR STATUS
	TWBR = 0x0C; //SET BIT RATE
}

void I2C_START()
{
	TWCR = (1<<TWINT)|(1<<TWEN)|(1<<TWSTA);
	while((TWCR & (1<<TWINT)) == 0);
	while((TWSR & (0xF8)) != 0x08);
}
void I2C_READAdress(/*unsigned char adress*/)
{
	TWDR = 0b01000001;
	TWCR = (1<<TWINT)|(1<<TWEN);
	while((TWCR & (1<<TWINT)) == 0);
	while((TWSR & (0xF8)) != 0x40);
}
unsigned char i2c_read_data()
{
	TWCR = (1<<TWINT)|(1<<TWEN);
	while((TWCR & (1<<TWINT)) == 0);
	while((TWSR & (0xF8)) != 0x58);
	return TWDR;
}
void I2C_stop()
{
	TWCR = (1<<TWINT)|(1<<TWEN)|(1<<TWSTO);
}
int main(void)
{
	DDRD=0xFF;
	I2C_INIT();
    while (1)
    {
		I2C_START();
		_delay_ms(1000);

		I2C_READAdress();
		_delay_ms(1000);
		PORTD=i2c_read_data();
		_delay_ms(1000);

		I2C_stop();
		_delay_ms(1000);
    }
}

here is slave code.

#define F_CPU 1000000UL
#include <avr/io.h>
#include <util/delay.h>

////////////////////////	KEYAPD	/////////////////////////////
#define KEY_PRT 	PORTD
#define KEY_DDR		DDRD
#define KEY_PIN		PIND

unsigned char keypad[4][4] = {
	{'A','3','2','1'},
	{'B','6','5','4'},
	{'C','9','8','7'},
	{'D','#','0','*'}};

	unsigned char colloc, rowloc;

	char keyfind()
	{
		while(1)
		{
			KEY_DDR = 0xF0;           /* set port direction as input-output */
			KEY_PRT = 0xFF;

			do
			{
				KEY_PRT &= 0x0F;      /* mask PORT for column read only */
				asm("NOP");
				colloc = (KEY_PIN & 0x0F); /* read status of column */
			}while(colloc != 0x0F);

			do
			{
				do
				{
					_delay_ms(20);             /* 20ms key debounce time */
					colloc = (KEY_PIN & 0x0F); /* read status of column */
					}while(colloc == 0x0F);        /* check for any key press */

					_delay_ms (40);	            /* 20 ms key debounce time */
					colloc = (KEY_PIN & 0x0F);
				}while(colloc == 0x0F);

				/* now check for rows */
				KEY_PRT = 0xEF;            /* check for pressed key in 1st row */
				asm("NOP");
				colloc = (KEY_PIN & 0x0F);
				if(colloc != 0x0F)
				{
					rowloc = 0;
					break;
				}

				KEY_PRT = 0xDF;		/* check for pressed key in 2nd row */
				asm("NOP");
				colloc = (KEY_PIN & 0x0F);
				if(colloc != 0x0F)
				{
					rowloc = 1;
					break;
				}

				KEY_PRT = 0xBF;		/* check for pressed key in 3rd row */
				asm("NOP");
				colloc = (KEY_PIN & 0x0F);
				if(colloc != 0x0F)
				{
					rowloc = 2;
					break;
				}

				KEY_PRT = 0x7F;		/* check for pressed key in 4th row */
				asm("NOP");
				colloc = (KEY_PIN & 0x0F);
				if(colloc != 0x0F)
				{
					rowloc = 3;
					break;
				}
			}

			if(colloc == 0x0E)
			return(keypad[rowloc][0]);
			else if(colloc == 0x0D)
			return(keypad[rowloc][1]);
			else if(colloc == 0x0B)
			return(keypad[rowloc][2]);
			else
			return(keypad[rowloc][3]);
		}

void i2c_slaveinit()
{
	TWAR = 0b01000000;
	TWCR = (1<<TWEN)|(1<<TWEA)|(1<<TWINT);
}
void i2c_ACK()
{
	TWCR = (1<<TWEN)|(1<<TWINT);
	while((TWCR & (1<<TWINT)) == 0);
	while((TWSR & (0xF8)) != 0xA8);
	/*TWDR = data;
	TWCR &= ~(1<<TWEA);
	TWCR = (1<<TWEN)|(1<<TWEA);*/
}
void i2c_transmit(unsigned char data)
{
	TWDR = data;
	TWCR &= ~(1<<TWEA);
	TWCR = (1<<TWEN)|(1<<TWINT);
	while((TWCR & (1<<TWINT)) == 0);
	while((TWSR & (0xF8)) != 0xC0);
	TWCR = (1<<TWEN)|(1<<TWEA)|(1<<TWINT);
}
void i2c_Match_ACK()
{
	while((TWSR & (0xF8)) != 0xA8)
	{
		TWCR = (1<<TWINT) | (1<<TWEN) | (1<<TWEA);
		while((TWCR & (1<<TWINT))==0);
	}
}

int main(void)
{
	char x;
	i2c_slaveinit();
    while (1)
    {
		//i2c_ACK();
		i2c_Match_ACK();
		x=keyfind();
		i2c_transmit(x);
    }
}

so I followed datasheet of atmega8 and first try to transmit a byte from slave and it works fine I get ACK after STA+R. then I try to put keypad code and I just replaced that byte with keyfind(); function which is also a char and now I don't get ACK after STA+R. is there any relation between them? can anyone help? here is pic of what is get