TDS not deductible on loss on subscription to chit

In this case AO has made addition merely on the basis of ledger extract filed by the assessee on the assumption that the said payments are interest payments which attracts TDS under the provisions of section 194A of the Act, without conducting further inquiries in the background of the assessee’s claim that the said payments are loss from subscription to chits. The AO should have conducted necessary inquiries before making the dis allowance u/s. 40(a)(ia). The AO has not exercised his option to conduct the necessary inquiries and made the addition purely on suspicion and surmises, based on t...