in theory it is, but in practice it depends by how your body burns these calories. before going into burning the hard sweated reserves of fat your body would get rid of ANYTHING it can.
It's as if you had lost your job and hence before dipping into your savings (fat) you would first of all you stop going out and entertain yourself (no more cinemas or dinners out, get the most basic offer for food to do yorur lunches and dinner, get back to basics), then you would *sadly* get rid of your goldfishes, plants in the balcony, and give away your dog and cat. After that, you would probably cut on Sky, cut your phoneline and broadband, go PAYG for the electricity and gas and etc. You might downscale your house. Last resort, you would take the kids to your mum and dad for a while. AFTER that, you would start dipping into your savings...
But as soon as you start working again, this new wage wouldn't go in getting back all the luxuries you had in the past. You would first of all restock your savings. You would get the essential back (your kids for example!!!!) but you won't do the excesses that you were doing before, and will make sure that you will put away much more money than what you have spent while being out of work.
That's the same for your body: if you start eating again what you ate before, you would gain back all the fat you've lost and even more, but you wouldn't get back all the muscle mass you've lost, making it increasingly more difficult to lose the weight in the future, as your metabolism slows down.
Going back to your question about burning 3500 calories, if you undereat 3500 calories in a week your body will burn muscle mass first to overcome the deficit. THEN and only then it will go into the fat. So you might lose 0.9lbs of muscles and 0.1 lb of fat, which means that then you'll need to undereat even further to lose again, and so goes on until you'll be eating so little that you'll get fed up and will start eating what you ate before, and put everything back on
Hope this helps!