The Revenue says my lender's settlement of her own addition under the 2024 Scheme cannot be used to show her creditworthiness, because section 92(4) says a declaration is not a concession. Is that right?
Not where the settlement is relied on only as a fact — that the source of the funds was independently examined in the lender's own reassessment and the resulting liability has attained finality. The Tribunal held that such factual reliance does not offend section 92(4) of the Direct Tax Vivad se Vishwas Scheme, 2024, upheld the CIT(A)'s deletion of a Rs 14.50 crore addition under section 68, and dismissed the Revenue's appeal.
Decided by the ITAT (Padmavathy S AM and Manu Kumar Giri JM, ITAT 'A' Bench Chennai) on 2026-07-13, reported as Direct Tax Vivad se Vishwas Scheme, 2024; ITA No. 3405/Chny/2025 (ITAT Chennai), AY 2016-17. It bears on section DTVSV 2024, section 68 of the Income Tax Act 1961, in Appeals, Cash Credits & Unexplained Money and Evidence & Burden of Proof matters.
This is the Revenue-side face of the 'a settlement is not a concession' rule, and it draws the line the rule actually requires. Section 92(4) stops either side from saying that the declarant accepted the tax position or acquiesced in the decision on the disputed issue. It does not stop a tribunal from noticing the plain fact that the source has been examined elsewhere and the tax on it has been collected. The distinction is between using the settlement as an admission of correctness — forbidden — and using it as evidence of finality, which the Tribunal permitted. For a section 68 defence the practical value is direct: where the very deposits that funded the loan were added in the lender's own hands and that addition has been closed under the Scheme, the creditworthiness objection has no work left to do.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The Assessing Officer added Rs 14.50 crore under s.68 in respect of loans received by the assessee from Smt. Alka Khetpalia. He accepted both the identity of the lender and the genuineness of the transactions, the amounts having been received and repaid through normal banking channels; the addition rested solely on the creditworthiness of the lender not having been established. The source of the funds available with the lender was afterwards examined independently in reassessment proceedings in her own case, where an addition of Rs 12,51,29,060 was made under s.68 in respect of the very deposits that had funded the loans, and that addition attained finality on settlement under the 2024 Scheme. A further Rs 3,39,90,000 of cash deposits had already been admitted by Shri Sunil Khetpalia before the Settlement Commission. The CIT(A) deleted the addition; the Revenue appealed, contending among other grounds that under s.92(4) of the Scheme a declaration is not a concession of the tax position, so the settlement could not establish creditworthiness.
The Revenue's appeal was dismissed (para 8) and the CIT(A)'s deletion of the Rs 14.50 crore addition under s.68 upheld (para 7). The s.92(4) contention was rejected on the facts: the CIT(A) had not proceeded on the footing that the settlement was a declaration about the correctness of the tax position, but had taken note of the undisputed factual position that the source had already been examined in the lender's own assessment and the liability arising had attained finality under the statutory scheme; such factual reliance does not offend s.92(4) (para 7).
The Tribunal narrowed the dispute to creditworthiness, identity and genuineness having been accepted (para 7). It found the source of the lender's funds had been independently examined in her own reassessment, where the very deposits were added under s.68 and the addition had attained finality on settlement under the 2024 Scheme, and that the aggregate that had already suffered tax or attained finality exceeded the amount advanced to the assessee. On the Revenue's s.92(4) point it distinguished between treating the settlement as a declaration about the correctness of the tax position, which the CIT(A) had not done, and referring to it to demonstrate that proceedings in the lender's case had reached finality and the source had been subjected to taxation, which is factual reliance and permissible. Once the source had been independently examined in the lender's hands and had attained finality, and the Revenue had brought no material to show the funds came from some other source, creditworthiness could not be rejected on the same premise; nor had the Revenue disputed the banking records, financial statements and tax records of the lender (para 7).
Such factual reliance does not offend the provisions of section 92(4) of the Scheme.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppNot where the settlement is relied on only as a fact — that the source of the funds was independently examined in the lender's own reassessment and the resulting liability has attained finality. The Tribunal held that such factual reliance does not offend section 92(4) of the Direct Tax Vivad se Vishwas Scheme, 2024, upheld the CIT(A)'s deletion of a Rs 14.50 crore addition under section 68, and dismissed the Revenue's appeal. This was decided by the ITAT (Padmavathy S AM and Manu Kumar Giri JM, ITAT 'A' Bench Chennai) and bears on section DTVSV 2024, section 68 of the Income Tax Act 1961. It is reported as Direct Tax Vivad se Vishwas Scheme, 2024; ITA No. 3405/Chny/2025 (ITAT Chennai), AY 2016-17. This is the Revenue-side face of the 'a settlement is not a concession' rule, and it draws the line the rule actually requires. Section 92(4) stops either side from saying that the declarant accepted the tax position or acquiesced in the decision on the disputed issue. It does not stop a tribunal from noticing the plain fact that the source has been examined elsewhere and the tax on it has been collected. The distinction is between using the settlement as an admission of correctness — forbidden — and using it as evidence of finality, which the Tribunal permitted. For a section 68 defence the practical value is direct: where the very deposits that funded the loan were added in the lender's own hands and that addition has been closed under the Scheme, the creditworthiness objection has no work left to do. If it applies to you, the first step is this: Frame the argument as finality, never as acceptance: say that the source has already suffered tax in the lender's hands, not that the lender or the department conceded anything.
The Assessing Officer added Rs 14.50 crore under s.68 in respect of loans received by the assessee from Smt. Alka Khetpalia. He accepted both the identity of the lender and the genuineness of the transactions, the amounts having been received and repaid through normal banking channels; the addition rested solely on the creditworthiness of the lender not having been established. The source of the funds available with the lender was afterwards examined independently in reassessment proceedings in her own case, where an addition of Rs 12,51,29,060 was made under s.68 in respect of the very deposits that had funded the loans, and that addition attained finality on settlement under the 2024 Scheme. A further Rs 3,39,90,000 of cash deposits had already been admitted by Shri Sunil Khetpalia before the Settlement Commission. The CIT(A) deleted the addition; the Revenue appealed, contending among other grounds that under s.92(4) of the Scheme a declaration is not a concession of the tax position, so the settlement could not establish creditworthiness. The matter was decided on 2026-07-13 by the ITAT (Padmavathy S AM and Manu Kumar Giri JM, ITAT 'A' Bench Chennai). On those facts the ITAT held as follows. The Revenue's appeal was dismissed (para 8) and the CIT(A)'s deletion of the Rs 14.50 crore addition under s.68 upheld (para 7). The s.92(4) contention was rejected on the facts: the CIT(A) had not proceeded on the footing that the settlement was a declaration about the correctness of the tax position, but had taken note of the undisputed factual position that the source had already been examined in the lender's own assessment and the liability arising had attained finality under the statutory scheme; such factual reliance does not offend s.92(4) (para 7).
The Tribunal narrowed the dispute to creditworthiness, identity and genuineness having been accepted (para 7). It found the source of the lender's funds had been independently examined in her own reassessment, where the very deposits were added under s.68 and the addition had attained finality on settlement under the 2024 Scheme, and that the aggregate that had already suffered tax or attained finality exceeded the amount advanced to the assessee. On the Revenue's s.92(4) point it distinguished between treating the settlement as a declaration about the correctness of the tax position, which the CIT(A) had not done, and referring to it to demonstrate that proceedings in the lender's case had reached finality and the source had been subjected to taxation, which is factual reliance and permissible. Once the source had been independently examined in the lender's hands and had attained finality, and the Revenue had brought no material to show the funds came from some other source, creditworthiness could not be rejected on the same premise; nor had the Revenue disputed the banking records, financial statements and tax records of the lender (para 7). In the words reproduced by the source cited on this page: "Such factual reliance does not offend the provisions of section 92(4) of the Scheme."
It was decided by the ITAT on 2026-07-13 and is reported as Direct Tax Vivad se Vishwas Scheme, 2024; ITA No. 3405/Chny/2025 (ITAT Chennai), AY 2016-17. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section DTVSV 2024, section 68, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed (para 8) and the CIT(A)'s deletion of the Rs 14.50 crore addition under s.68 upheld (para 7). The s.92(4) contention was rejected on the facts: the CIT(A) had not proceeded on the footing that the settlement was a declaration about the correctness of the tax position, but had taken note of the undisputed factual position that the source had already been examined in the lender's own assessment and the liability arising had attained finality under the statutory scheme; such factual reliance does not offend s.92(4) (para 7). It arises in Appeals, Cash Credits & Unexplained Money and Evidence & Burden of Proof matters, on section DTVSV 2024, section 68 of the Income Tax Act 1961, and was decided by Padmavathy S AM and Manu Kumar Giri JM, ITAT 'A' Bench Chennai. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Get the lender's assessment or reassessment order, the amount added, and the Scheme certificate showing the settlement, so that the finality is documented and not merely asserted. Show the aggregate that has already suffered tax or attained finality exceeds the amount advanced — that arithmetic was what carried the day here. Keep the ordinary s.68 limbs in place: identity and genuineness were already accepted by the Assessing Officer, and the whole dispute had narrowed to creditworthiness. If the Revenue invokes s.92(4), answer it by pointing to what the CIT(A) actually relied on; the objection fails only if the order below did not treat the settlement as a concession.
Validity check could not be completed. Validity check could not be completed. The order is very recent, no later treatment was searched for or located, and it is not known whether the Revenue has taken it further. The reading of the 'not a concession' provision is consistent with the ITAT Delhi in Dev Priya Products and in Bain & Company Inc., USA, both on the corresponding Explanation to s.5 of the 2020 Act and both read this pass. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order is short — eight numbered paragraphs — and para 7 contains the whole of the Tribunal's own reasoning; the sentences quoted are from that paragraph. The Revenue's grounds, which set out the s.92(4) contention at grounds (ii) and (iii), appear on the page without paragraph numbering and no locator has been taken from them. The order reproduces the substance of s.92(4) of the 2024 Scheme through the Revenue's ground rather than by extracting the section; the wording of the equivalent provision for the 2020 Act, the Explanation to s.5, was verified independently this pass against the Kerala and Patna High Court judgments. The pronouncement date, 13 July 2026, and the ITA number 3405/Chny/2025 are as printed. The Settlement Commission proceeding of Shri Sunil Khetpalia referred to in para 7 is not otherwise described. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed (para 8) and the CIT(A)'s deletion of the Rs 14.50 crore addition under s.68 upheld (para 7). The s.92(4) contention was rejected on the facts: the CIT(A) had not proceeded on the footing that the settlement was a declaration about the correctness of the tax position, but had taken note of the undisputed factual position that the source had already been examined in the lender's own assessment and the liability arising had attained finality under the statutory scheme; such factual reliance does not offend s.92(4) (para 7).
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
You have a document that says so. Does that settle it?
If the department doubts my shareholders, can it add the money to my income?
You gave particulars, paid by cheque and got a confirmation. Has the burden shifted?
Can the whole of a bogus purchase be added, rather than a percentage?