Judgment :- R.Jayasimha Babu, J. Two questions have been referred to us at the instance of the revenue. The assessment year is 1986-87. The questions are: 1.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the rent receipts derived by the assessee company from letting out of properties should be assessed under the head 'business' thereby allowing the expenses incurred for letting out the properties as business expenditure? 2.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in not considering the applicability of the provisions of Section 43B for disallowing the disputed Urban Land Tax if the income is to be assessed under "Business" and the non-deductibility of the cost of supplying drinking water from the income from property?" 2. The assessee is an incorporated company. The main object of the assessee company is acquiring certain properties in the city of Madras, to let out such properties to make advances on the security of land and building and earn interest thereon. The assessee rented out a property owned by it and that rental income was claimed to be income from business. Though that stand of the assessee had been accepted by the assessing authority in earlier years, for this assessment year, the assessing officer took the view that the rental income received is "income from property" and is to be assessed under that head and not under the head "income from business". On appeal, the Commissioner agreed with the assessing officer. On further appeal, the Tribunal accepted the assessee's contention and held that the income should be treated as 'business income'. 3. The Supreme Court in the case of East India Housing and Land Development Trust Ltd. vs. Commissioner of Income-tax, West Bengal, (1961) 42 ITR 49 while considering the head under which the rental realised from a company formed with the object of setting up of markets from the shops owned by it, should be assessed, observed, "Income derived by the company from shops and stalls was income received from property and fell under the specific head described in Section 9. The character of that income was not altered because it was received by a company formed with the object of developing and setting up markets." Section 9 referred to therein is Section 9 of the Income-tax Act, 1922 which corresponds to Section 22 of the Income-tax Act, 1961. 4. A constitution Bench of the Supreme Court considered the claim of an assessee who had let out a building fully equipped and furnished for the use as a hotel, that the income derived therefrom by way of rental as also for the hire of furniture and fixtures should be treated as business income, in the case of Sultan Brothers vs. Commissioner of Income-tax, (1964) 51 ITR 353. The Constitution Bench negatived that claim of the assessee and referred with approval to the observations made in the case of East India Housing and Land Development Trust Ltd. vs. Commissioner of Income-tax, West Bengal, (1961) 42 ITR 49. 5. The facts of the present case are similar to those considered in the case of East India Housing and Land Development. The fact that the assessee company was formed with the object of acquiring certain properties in the city of Chennai and deriving income by letting those properties out, would not render that income business income. It is the income from the property and is to be assessed under that head only. The first question is answered in favour of the revenue and against the assessee. 6. The second question does not require consideration in view of our answer to the first question.