We report results of the atomic and electronic structures of Al 7C cluster using ab initio molecular dynamics with ultrasoft pseudopotentials and generalized gradient approximation. The lowest energy structure is found to be the one in which carbon atom occupies an interstitial position in Al7 cluster. The electronic structure shows that the recent observation [Chem. Phys. Lett. 316, 31 (2000)] of magic behavior of Al7C- cluster is due to a large highest occupied and lowest unoccupied molecular orbital (HOMO-LUMO) gap which makes Al 7C- chemically inert. These results have further led us to the finding of a new neutral magic cluster Al7N which has the same number of valence electrons as in Al7C- and a large HOMO-LUMO gap of 1.99 eV. Further, calculations have been carried out on (Al7N)2 to study interaction between magic clusters.