M.Y. Eqbal, J.

1. This is a reference under Section 256(2) of the Income-tax Act, 1961 whereby the following questions of law have been referred to this Court-

1. Whether on the facts and circumstances of the case and in law, the Ld. Tribunal was justified in deleting the addition made under the head "Income from House Property" arising out of determining the annual value in respect of portion of the house property rented out to M/s Wool House on the basis of rent received in respect of similar portion of the house property-rented out to a third party?

2. Whether in the facts and circumstances of the case and in law, the Ld. Tribunal was justified in directing that Annual value of the property in respect of portion rented to M/s Wool House should be determined obo actual rent received from M/s Wool House, when because of the close relationship between the assessee and M/s Wool House, the annual value should be determined on the consideration of rent receivable indicated by the rent received by the assessee from a similar portion of the building from a third party?

3. Whether on the facts and circumstances of the case and in law, the Ld. Tribunal was justified in holding that th