5 brothers (not direct brothers, cousin brothers) have small adjacent properties (~ 70 cents each) having rubber plantation. One brother (who files ITR each year) manages affairs of all plantation as brothers stay in different cities. (Expenses for nearly 7 years, until tapping started, have all been shared by brothers through cash adjustments in previous years.) Expenses are incurred (mainly fertilizer and labour charges) as and when required and these are usually out of pocket expenses without paper vouchers. Latex (from all plots) is sold (thru producers cooperatve society), but sale proceeds are credited in bank account of the one brother managing affairs. Income has to be distributed to brothers and expenses have to be collected.
Query: (1) Would a plain paper statement of account of expenses and income and transferring eligible share thru bank transfers to brothers will be sufficient explanation for IT in case of a query from IT department? Can cash be paid/received in settlement?
(2) This being agricultural income (and exempt), should the income be added in IT return?
(3) Are brothers liable to include such income in their IT returns (only two others file ITR)?
Thanks in advance for expert advice.
CAclubindia
