Assessee is partnership firm engaged in the business of manuf of pickles and spices. During the course of search action with the Mr. X certain loose papers were found . on the basis of noting on the loose papers and the explanation given by Mr. X during post search enquires and his addmission before the his application before ITSC, Notice U/Sec.153C was issued . Assessee has given detailed response to all the Notices and denied having such transcation with the Mr. X . However A O has not appreciated the submission has made the addition of  1 cr as undisclosed Investment U/SEc. 69A and also made the reference to the Addl CIT for initiating the penalty proceedings U/SEc. 271D and 271E.

Additional CIT has also levied penalty U/SEc. 271D and 271E on the basis of same noting .

Whether Addition U/SEc. 69A  on the basis of Noting found in third person search and his admission before the ITSC and Levy Penalty U/Sec. 271D and 271E is justified in law ?

what is remedy avaialble to the assessee?

Pl guide.