ASST. COMMISSIONER OF INCOME TAX, CHENNAI vs. ANTILIA VENTURE CAPITAL, CHENNAI

PER MANU KUMAR GIRI, JM:

The captioned Appeal filed by the Revenueis directed against the order of the Ld. Commissioner of Income Tax (Appeals), CIT(A) Chennai-20 [CIT(A)] dated12.09.2025 Assessment Year 2016-17. 2. The revenue has raised the following grounds of appeal: The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. (i) The Ld CIT(A) has erred while deleting the unexplained credit of Rs 14,50,00,000/- made u/s 68 on the grounds that the loan creditor, Ms.Alka Khetpalia, has settled her appeal under VsVs

ITA No 3405/Chny/2025 (AY 2016-17) ACIT Vs Antilia Venture Capital :: 2 :: 2024, which she had filed before CIT(A) against the addition of Rs. 12,51,29,060/- made u/s 68 of the Income Tax Act. (ii) The Ld. CIT(A) has failed to consider that filing a declaration under the VSV Scheme is a means to settle a tax dispute and grants immunity from further proceedings, penalties, or interest related to those specific tax arrears for the declarant. It does not imply that the assessee has accepted the tax assessment or that the underlying amount is a legitimate, untaxed source of income that can be transferred and used by a third party as an "explained" source. (iii) The Ld.CIT(A) has failed to consider that vide section 92(4) of the VsVs Scheme 2024 it is mentioned that making a declaration under this Scheme shall not amount to conceding the tax position and it shall not be lawful for the income-tax authority or the declarant being a party in appeal or writ petition or special leave petition to contend that the declarant or the income-tax authority, as the case may be, has acquiesced in the decision on the disputed issue by settling the dispute. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored.

ITA No 3405/Chny/2025 (AY 2016-17) ACIT Vs Antilia Venture Capital :: 3 :: 4. In appeal, the ld.CIT(A) deleted the addition holding that the source of funds in the hands of Smt. Alka Khetpalia had subsequently been examined in her own assessment proceedings and the addition made therein had attained finality under the Direct Tax Vivad Se Vishwas Scheme, 2024, and a further sum of Rs.3.39 crore had already been offered by Shri Sunil Khetpalia before the Settlement Commission. Thus, the source of the loan stood explained. Now revenue is in further appeal before us.

ITA No 3405/Chny/2025 (AY 2016-17) ACIT Vs Antilia Venture Capital :: 4 :: source of funds was fully demonstrated through opening bank balance, inter-bank transfers and cash deposits.The cash deposits were independently subjected to tax proceedings in the hands of Smt. Alka Khetpalia, resulting in an addition u/s. 68, which has attained finality upon settlement under the DTVSV Scheme.In addition, Rs.3.39 crore had already been disclosed by Shri Sunil Khetpalia before the Settlement Commission.Once the very source of the lender has been subjected to tax in the hands of the lender/beneficial owner, the same amount cannot again be treated as unexplained in the hands of the borrower.The assessee had discharged the onus regarding identity, genuineness and creditworthiness, and no contrary evidence had been brought by the Revenue.

ITA No 3405/Chny/2025 (AY 2016-17) ACIT Vs Antilia Venture Capital :: 5 :: attained finality upon settlement under the Direct Tax Vivad Se Vishwas Scheme, 2024. Besides, an amount of Rs.3,39,90,000/- representing cash deposits had already been admitted by Shri Sunil Khetpalia before the Settlement Commission. Thus, the aggregate amount which has already suffered tax or attained finality in the hands of the concerned persons is admittedly more than the amount advanced to the assessee.The principal contention of the Revenue is that settlement under the DTVSV Scheme does not amount to acceptance of the tax position in view of section 92(4) of the Scheme. We are unable to accept this contention in the facts of the present case. The ld.CIT(A) has not proceeded on the footing that the settlement constitutes a declaration regarding the correctness of the tax position. Rather, the ld.CIT(A) has taken note of the undisputed factual position that the source of the deposits has already been examined in the lender's own assessment proceedings and the tax liability arising therefrom has attained finality under the statutory scheme. The settlement has been referred to only to demonstrate that the proceedings in the lender's case have reached finality and the source has already been subjected to taxation. Such factual reliance does not offend the provisions of section 92(4) of the Scheme.Once the source of funds has been independently examined in the hands of the lender and has attained finality, and the Revenue has not brought any material to establish that the funds advanced to the assessee emanated from any source other than those already considered in the lender's assessment, the creditworthiness of the lender cannot be rejected merely on the same premise. The Revenue has also not disputed the documentary evidence establishing the banking transactions, financial statements and tax records of the lender.We therefore find no infirmity in the

ITA No 3405/Chny/2025 (AY 2016-17) ACIT Vs Antilia Venture Capital :: 6 :: conclusion reached by the CIT(A) that the assessee had discharged the burden cast upon itu/s. 68 by establishing the identity of the creditor, genuineness of the transactions and the creditworthiness of the lender. Accordingly, we uphold the order of the CIT(A) deleting the addition of Rs.14,50,00,000/- made u/s. 68 of the Act. The grounds raised by the Revenue are dismissed.

Sd- Sd- (प�ावती एस) (मनु कुमार िग�र) (PADMAVATHY S) (MANU KUMAR GIRI) लेखा सद)या/ACCOUNTANT MEMBER �या�यक सद)य/JUDICIAL MEMBER चे�नई/Chennai, *दनांक/Dated: 13th July, 2026. SNDP, Sr. PS आदेश क ��त+ल,प अ-े,षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF Digitally signed SANDEE by SANDEEP KUMAR P KUMAR Date: 2026.07.15 17:29:01 +05'30'