We find it convenient to dispose of these four appeals together. main issue in all these four appeals is whether development rebate and investment allowance granted to assessee for assessment years 1974- 75 and 1978-79 to 1980-81 were properly withdrawn. 2. assessee is firm having business in oil milling. In a assessment year 1974-75, assessee had installed certain machineries on which development rebate was allowed amounting to Rs. 98,036. assessee had made petition under section 264 of Income-tax Act, 1961 ('the Act') to t h e Commissioner in which certain further reliefs were asked for. Commissioner in his order had directed ITO to consider assessee's pleas and reform assessment order accordingly. ITO passed order on 6-5- 1982 wherein he had considered issues raised by assessee in section 264 proceedings before Commissioner. For assessment year s 1978-79 to 1980-81, ITO, in course of original proceedings, was satisfied that assessee was entitled to investment allowance in respect of certain machineries installed by him. He had granted such investment allowances for these three years. investment allowance for assessment year 1978-79 was Rs. 6,65,290, for year 1979-80 was Rs. 10,44,159 and for year 1980-81 was Rs. 3,91,943. 3. Subsequent to these assessments, ITO came to know that a assessee had entered into lease agreement by which these machineries had been leased out to certain parties. We may give details of lease at this stage. lessee is Agrawal Industries and lease deed in dated 12-1-1978. As per lease deed, lessor, i. e., assessee gave on lease all machinery, plant and manufacturing unit for period of five years from 1-4-1978 on annual rent of Rs. 3 lakhs. reasons for lease are given in preamble which says that due to indifference, lack of interest, withdrawal of funds, etc., by some of partners of lessor firm, business of lessor firm is becoming more and more uneconomical and, hence, managing partner thought it best in interests of firm to lease out industry and machineries. At end of lease period, lessees have to hand over unit in good running condition, to assessee. During continuance of lease, all major repairs and replacements costing more than Rs. 1,000 shall be done by lessors and water and electricity charges and other utility charges shall be paid by lessees. 4. When ITO came to know of this lease, he formed opinion that assessee had transferred machineries on which investment allowance had been granted. He, therefore, passed order under section 155(4A) of Act for assessment year 1980-81 withdrawing investment allowance of Rs. 3,99,943 allowed for that year. 5. assessment orders for years 1974-75, 1978-79 and 1979-80, to which we have made reference earlier, were pending before Commissioner (Appeals) on certain other points of dispute. ITO wrote to Commissioner (Appeals) drawing his attention to this fact that assessee had transferred machineries within period of 8 years of installation and, therefore, development rebate and investment allowance granted for these three years have to be withdrawn. He requested the Commissioner (Appeals) to enhance t h e assessments by with drawing these allowances. Commissioner (Appeals) accepted that he had power to enhance assessment, but he gave finding that assessee had not transferred these machineries within meaning of section 34(3) (b) of Act for purpose of development rebate and section 34A (4) of Act for purpose of investment allowance. He pointed out that assessee continued to be owner of these properties and even allowed depreciation thereon. Insurance premium on these assets continued to be paid by assessee. He then pointed out that expression 'sold or otherwise transferred' had to be interpreted on principles of ejusdem generis and meaning of words 'otherwise transferred' will have to be taken from expression 'sold'. He was of opinion that definition o f word transfer in section 2(47) of act cannot apply for withdrawal of development rebate or investment allowance. He also accepted assessee's submission that what was granted was not lease but licence to use machineries. Apart form these reasons, he gave another reason why there was n o need to withdraw rebate allowed. He pointed out that specific provision are in statute in section 155(4A) and section 155(5A). Both these sections refer to section 154 of Act for withdrawing allowances granted. He then refer to section 154 of Act for withdrawing allowances granted. He then pointed out that it was well settled that anything which is debatable cannot come under purview of section 154 and, as consequence, section 155(4A) and section 155(5A). He, therefore, held that there was no case for withdrawal of rebates. 6. department has come on appeal. Shri Padmanabhan for department submitted that 'lease' is also mode of transfer of property recognised under Transfer of Property Act, 1882. He then submitted that definition of word transfer in section 2(47) of 1961 Act will also be applicable in determining whether transfer has taken place for purpose of withdrawal of development rebate and investment allowance. He pointed out that Supreme court had occasion to consider decision of Karanataka High court in case of Addl. CIT v. M. A. J., Vasanaik (1979) 116 ITR 110 while disposing of appeal in case of Sunil Siddharthbhai v. CIT (1985) 23 TAXMAN 14W. Karnataka High Court order applying provision of section 2(47) for purpose of withdrawal of development rebate was approved by Supreme High Court in this decision. He also criticised finding of Commissioner (Appeals) that in interpreting expression 'sold or otherwise transferred', rule of just gainers will be applicable, according to him. finding of Commissioner, he submitted, has not found favour either with Karnataka High Court or with Supreme Court. He then point out that mere fact that depreciation has been allowed to assessee is not all all material. Even if lease rent is to be assessed under section 56 of Act, assessee will be granted depreciation. He then submitted that what was 'transferred' under Transfer of Property Act has to be considered as transfer for Income-tax Act also. In other words, act cannot be more restrictive in meaning to be given to word 'transfer' than Transfer of Property Act. He then referred to division of Punjab and Haryana High Court in case of Watkins Mayor (Agrico) (P.) Ltd. v. CIT (1979) 117 ITR 202, wherein they have accepted that lease of property would amount to transfer for purpose of section 34 and disentitles assessee to rebates. 7. Shri M. J. Swamy for assessee submitted first of all that withdrawal of development rebate and investment allowance is already barred by limitation and he submitted that he had taken up this point in additional ground before Commissioner (Appeals). Commissioner, however, had not agreed to his submission. But, according to Shri Swamy, withdrawal has to be done within period of four years from end of previous hear in which machinery was transferred and since that period has expired, matter has become barred by limitation. He then submitted that there was no transfer when assets are merely leased out for short period. He referred to decision of Andhra Pradesh High court in case of Ghanshyamdas Kishan Chander v. VIT (1980) 121 ITR 121, for proposition that not all transfers under Transfer of Property Act could be considered as transfers in expression sold or otherwise transferred found in section 34. In that case, question was whether on mortgage being made on property there was transfer. Under Transfer of Property Act mortgage is also transfer. However, Andhra Pradesh High court has held that on mortgage there is no question of any transfer for purpose of capital gains. He then submitted that entire interest in property should be transferred in order to satisfy conditions for withdrawal of development rebate. He then submitted that immovable properties were also involved in this case and since there was n o registered document, there could be no question of transfer of those properties. 8. Shri Swamy then pointed out that lease is only for period of five years. It is temporary period. All major repairs have to be done by assessee. All replacements have to be done by them. insurance has also to b e affected by assessee. Thus, for all legal purposes, assessee continues to be owner. Depreciation has also been allowed on asset. In partners' hands their interest is shown for wealth-tax purposes. Taking all these things into account he submitted that what was granted was only licence to Agrarwal Industies to use machineries and it did not amount to lease. He then pointed out that difference between lease and licence has been explained by Bombay High court in case of CIT v. Bayer Agrochem Ltd. (1982) 134 ITR 240. If tests given in that authority are applied, it would be seen that it was only licence. 9. We have considered submissions. We will first take up point 9. We have considered submissions. We will first take up point raised by Shri Swamy that matter is barred by limitation. His submission is that as per section 155(4A) , development rebate and investment allowance have to be withdrawn within period of four year from end of previous year in which transfer took place. Here, transfer having taken place in financial year 1978-79. four year period has to be reckoned from 31-3-1979. That is, any order withdrawing development rebate and investment allowance must be passed by 31-3-1983. Since that was not done, matter h s become barred by limitation. Now, ITO had noticed after assessments were completed that assessee had entered into lease agreement with regard to plant and machinery on which development rebate/investment allowance was granted. According to him, if this knowledge was with him at time of assessment itself, there was no need for him to grant these allowances. Now, question whether in such circumstances ITO should first grant allowance and later withdraw it by order under section 155(4A) is now settled by decision of Supreme Court in case of Indian Motors Transport (P.) Ltd. v. CIT (1985) 156 ITR 489. Supreme Court has held in that case that it was not necessary for ITO to have first allowed development rebate and then canceled it, since it was condition for allowance of development rebate that assessee did not dispose of machinery to any person other than Government before expire of period and such condition has not been fulfilled and this fact cam to notice of ITO when assessment was being made by him. Therefore, had ITO been aware of this position when original assessment order was made, he could certainly have declined to grant these allowances. 10. Now, ITO requested Commissioner (Appeals) to issue enhancement notice by which allowances would be recalled. This request to Commissioner is quite is quite in order. It is well settled by decision of supreme Court in case of CIT v. Mc Millan & Co. (1958) 33 ITR 182, that powers of appellate authority are coterminous with powers of ITO. He can do what ITO can do and he can also do what ITO failed to do. Now if ITO having knowledge that machineries were transferred had yet granted development rebate and investment allowance, it is omission and that omission can be made good by appellate authority. All that ITO has done here is to bring to his notice that transfer has taken place. So, first appellate authority, vested with powers of ITO while making assessment, can very well enhance assessment by withdrawing rebates allowed. 11. While appellate authority takes any action in course of appeal proceedings exercising powers vested in him which include powers of Act will not be applicable. It is now well settled by decision of Supreme Court in case of CIT v. National Taj Traders (198 0) 121 ITR 535. Supreme Court therein was concerned with time limit of two years for passing revisionary order under section 33B of Indian Income tax Act 1922 ('the 1922 Act') which corresponds to section 263 of 1961 Act. Tribunal, on hearing appeal from order under section 33B, had set it aside directing Commissioner to rehear and pass another order. Such order obviously would be passed long after limitation given in section expired. supreme court then pointed out that limit given in section was applicable only to made orders of Commissioner in revision and not to orders made by him in pursuance of direction of appellate authority or higher authority. 12. In case before us, there is no time limit for Commissioner (Appeals) to dispose of matter pending before him. In course of his hearing of appeal, it is open for him to decide that enhancement is called for and that development rebate was wrongly allowed. No time limit will interfere in exercise of powers of appellate authority. So, this contention, that matter has already become barred by limitation, is totally without any merit. 13. real issue we have to consider is whether there is sale or otherwise transfer within meaning of section 34(3) (b) and section 32A (5). Shri Swamy's contention is that although deed is called lease deed, it is merely licence. We have to examine this contention and decide whether it is lease or licence. lease is transfer of property recognised under Transfer of Property Act. licence, on other hand, as defined in section 52 of Indian Easements Act, 1982 is right to-do or continue to do in or upon immovable property of grantor something which would in absence of such right, be unlawful and such right does not amount to easement or interest in property. 14. Both concepts of 'lease' and 'licence' refer to immovable property. provision of Transfer of Property Act dealing with lease of properties, in section 105 onwards specifically refer to immovable property. Section 52 of Indian Easements ACt also refers to immovable property. Therefore, we need consider these provisions only if property concerned subject to agreement is immovable property. This would take us to consider lease agreement to find out what type of properties are transferred. 15. schedule to lease deed of 12-1-1978 describes properties as under: "All those manufacturing complete units in working order situated in premises No. 1-8-576 and 576/1 such as (1) Oil expeller section, (2) Refinery and Vanaspati Section (3) Solvent Extraction Plant. (4) Industrial Oils Refining and Bardening Section and (5) Workshop and all other necessary accessories, such as Boilers, etc. details of Machinery have been set out in separate statement and signed by both parties. It will be seen from description that agreement is more about machineries, i. e. oil expeller, refining and Vanaspati and solvent extraction plant, and it also refers to premises in which these machineries are situated more as requirement of identification. premises mentioned are certain immovable property. machineries mentioned are movable properties. We may mention here that no case had been made out that these machineries are embedded in earth. Therefore, we have to consider them only as movable properties. 16. No doubt, agreement dated 12-1-1978 is styled as lease deed. It is now well settled that nomenclature to deed does not settle any issue. It is substance of matter that has to be inquired into. 17. question whether premises mentioned in schedule given to Agrawal Industries would amount to lease or licence will certainly take some importance. However, since premises is immovable property, if transfer is to be made in law, then t transfer deed requires registration. It is accepted position that lease deed has not been registered. Therefore, even if there is alleged transfer of premises mentioned in schedule to agreement, in law it has not been transferred. So, we need not consider whether it amounts to lease. 18. Assuming that it has to be considered as lease notwithstanding that it is not registered then we may have to consider Shri Swamy's argument whether i t would amount to lease or licence. distinction between lease and licence is fairly well settled and they have been referred to by Bombay High court in decision in case of Bayer Agro Chem. Ltd. (supra) to which reference has already been made. broad distinction is first whether exclusive possession is given to license and whether instrument only confers use of property in particular way or on certain terms while same remains in possession or control of owner. So we should ask ourselves whether instrument creates interest in property in possession or control of owner. So, we should ask ourselves whether instrument creates interest in property in favour of Agarwal Industries. We do not find it to be so. As we mentioned, premises are noted only to show what are machineries given to them by assessee. All clauses in agreement deal with machineries which had been let out. There is nothing in them which would show that interest has been created in premises itself. Therefore, assuming there is transfer, we have to accept submission that it would amount to licence only. We have already noticed that full possession has not been given to Agarwal Industries. There are clauses which give power to assessee to keen control over premises. 19. Now, definition of licence itself would show that no interest in property is conveyed to licencee. In fact, definition goes to such extent as to showing that but for licence licencee would be treated as trespasser. Under these circumstances, it is easy to say that no transfer is involved. 20. We will now take up question of machineries which are movable properties. As we have pointed out above, neither Transfer of Property Act and provisions regarding licence, will be applicable to movable property. What would apply appear to be provisions regarding bailment. assessee has let out their machineries on hire. Hiring of machineries for consideration is accepted to be type of bailment. As per classification of bailment given in Halsbury's Law of England, it would come under Location conduction where chattels or services are hired for reward. In this case, machineries are hired for rent fixed in terms. difference between bailment and any other transfer is too well known to be stated here. In all other transfers, there would be no provisions regarding return of goods transferred. bailment by contrast requires return of goods in original condition after bailment period is over. In this case, hire is only for period of five years, and so it is clearly bailment for reward or hire charge. 21. next question would be whether such bailment would be considered as transfer for purpose of sections 34 and 32A (5) . We must accept Shri Padmanabhan submission that extended definition of transfer given in section 2(47) can also be applied in considering whether transaction would amount to sale or transfer for purpose of recalling development rebate and investment allowance. Karnataka High Court in case of M. A. J. Vasanik (supra) has expressed such view and it has been approved by Supreme court in case of Sunil Siddarthbhai (Supra). Now, definition of transfer includes sale, exchange relinquishment of asset or extinguishment of any rights there in or compulsory acquisition thereof. It is nobody's case that agreement amounts to sale or exchange. It could be considered as relinquishment but in case of relinquishment according to Bombay High Court in case of CIT v. Rasikalal Menekalal (HUF) (1974) 95 ITR 656, interest of person in property should be either given up, abandoned or surrendered, but property in which interest is relinquished should continue to exist and property continues to be owned by some person or persons after transaction of relinquishment. This would not apply in assessee's case because assessee has to relinquished any interest therein. After period of hire, it is assessee alone who would be owner of property. We may mention here in passing that there is conflict on requirement of whether asset itself should continue to exist after relinquishment. Whereas Bombay High court has held it should, Gujarat High Court in case CIT v. R. M. Amin (1971) 82 ITR 194, has held it is not necessary. Be that as it may there is no case for relinquishment. Similarly, it cannot be said that any interest of assessee has been extinguished. Extinguishment requires permanent effacement whereas assessee continues to have full rights in this property. Therefore, there is no question of deed being considered as falling into any of categories mentioned in section 2(47) as transfer. If there is no transfer, there could be no question of recalling of development rebate and investment allowance. 22. It now remains to refer to some of arguments of Shri Padmanabhan. He had submitted that expression transfer cannot be constructed in narrower facie on for purpose of Act. But, as pointed out by Shri Swamy, Andhra Pradesh High court had held that mortgage is not transfer for this purpose, in National Taj Traders case (supra). It is transfer for purpose, of Transfer of Property Act but would not amount to transfer for purpose of 1961 Act, Therefore, it appears that expression cover different fields in two enactments. 23. He had relied on decision of Punjab and Haryana High Court in Watkins Mayor (Agrico) (P.) Ltd's case (supra) wherein High court has upheld withdrawal of development rebate. In that case, assessee had purchased certain machineries but could not install them and put them to business owning to paucity of space. It was let out on hire to another company. High court found that letting out of machineries was not part of business activity. Since there was no business activity, they held that no development rebate is to be granted. In this case, main question was whether where machineries were let out and never installed for purpose of assessee's business it could be considered to be eligible for development rebate. It was not case where after use in business and after grant of development rebate it was transferred to others. So, real ratio arising from facts of case being different, is has no application to case before us. 24. As far assessment year 1974-75 is concerned, there is one additional reason. In original assessment, ITO has grants development rebate. assessee had filed petition under section 264 to Commissioner requiring certain further reliefs. ITO has passed another order in which he considered further relief required by assessee. Against this order, assessee had gone on appeal before Commissioner. It was in these appeal proceeding that ITO requested Commissioner to make enhancement of assessment by with drawing development rebate. It will be seen that allowance of development rebate was not point in assessment made by ITO which is subject matter of appeal before Commissioner. That was in original assessment which had become final. Therefore, grant of development rebate was not in order of ITO pursuant to petition under section 264 and if that was not part of his order, Commissioner could not enhance it. 25. For these reasons, we hold that department is not justified in its contention that he development rabate and investment allowance should be withdrawn. 26. We may take up few other points which had been raised in grounds of appeal. Commissioner (Appeals) had directed ITO to allow weighted deduction under section 35B of Act, at 90 per cent of commission paid to Ratilal Nagardas & Co. and Hydrabad Export Corpn. and on entire amount of commission paid to Export Credit Corpn. According to department, this direction of Commissioner is not correct. This matter has come up before Tribunal in assessee's own case for assessment years 1975-76 and 1976-77. Tribunal after considering all submissions, has held that assessee is entitled to deductions. Shri Padmanabhan had referred to decision of Madras High Court in case of CIT v. Southern Sea Foods (P.) Ltd. (1983) 140 ITR 855. In that case, assessee attempted to bring case under sub clause (viii) of section 35B (1) (b). This was rejected by High court. High court had also observed at page 859 that no other sub clause in section 35B (1) (b) would be applicable and no argument was submitted on that point. Special Bench decision of Tribunal, on which reliance has been placed by Bench disposing of assessee's appeal for assessment years 1975-76 and 1976-77 had pointed out that the assessment years 1975-76 and 1976-77 had pointed out that commission agents provided assessee information regarding foreign market and, insofar as they tried to canvass orders, they also in way advertised their goods. Therefore, this expenditure will be coming under sub clause (i) or sub- clause (ii) of section 35B (1) (b). So, decision relied on by department does not require any reconsideration of our earlier findings. 27. In result, appeals stand dismissed. *** INCOME TAX OFFICER v. B. RAJENDRA OIL MILLS & REFINERY