A search and seizure operation was carried out by the department at the business premises of the aforesaid Group as well as residential premises of the promoters and directors of the company but No incriminating material was found during the search action.  During the assessment proceedings, the Assessing officer had asked about the sources of the aforesaid income offered/declared by the assessee regarding which the common explanation given by the assessees was that the same was from speculation in the sale/purchase of the agricultural land, and since, no records were being maintained by the assessee in this regard, the income was offered under section 69A ‘subject to no explanation’.  As the assessees could not satisfactorily explain the sources of income, the Assessing officer, therefore, invoked the Explanation 1 to section 271(1)(c) and initiated penalty proceedings and levied the penalty under section 271(1)(c).  There was no material on record to indicate that the particulars furnished by the assessee were factually incorrect.  Under the circumstances, even otherwise, on merits, the penalty under section 271(1)(c) is not attracted in this case.    (AY.   2008-09 to 2012-13)