• Tax on joint account

This is related to FY 2010-2011.
My wife and self have a joint account. My name is the first name.
My wife has a joint property with my younger (2) brothers.
All the three persons (my wife and 2 younger brothers) sold the property in 2010. The receipts (cash and cheques) partially deposited in the joint account. 
The total of such deposits were about Rs. 21 lakhs of which cash deposits amount to Rs. 17 lakhs and the balance is of cheque credits. The ITR was not filed. However the ITO got the bank statement and treated the entire amount Rs. 21. Lakhs as my taxable income and accordingly exparte assessment was made with tax and penalties etc. I have made an appeal to IT commissioner that IT notice was not recd. by me . 
Registered encumbrance certificates (EC) of 2010-2011 show the details of sales, names of the persons who sold etc. It could be established from this that the deposited income was due to the sale of the property by my wife and other two brothers. Since it is a joint account and my name being the first one, the ITO levied the tax on me.
Now the queries are as below;
Query (1).
From the EC certificates it can be established that the income does not belong to me and it belongs to my wife only. So can I claim to get exempted from that taxable income?
Query (2). 
Since it was a sale, through an agent, receipts were received not against any sale deed but in bulks in several installments and not against any particular individual names. In the process cash amounting to one of my brothers got clubbed in my account . Money belonging to him was to the extent of Rs. 12.5 lakhs which got credited in my account. This is mainly because the receipts were in bulk in a single name and not against others. I was a senior citizen and my brother was not so. In order to take advantage of extra interest benefit 3 s FD’s amounting to Rs. 12.5 lakhs (5 + 5+ 2.5 = 12.5) of his share were made in my name on his behalf, with his name as a nominee. 
After the maturity of the FD’s , the matured amounts were paid to him through 3 different cheque for which details of cheque no., date of cheque are available. They got duly credited in his account. To prove that the deposits were made on his behalf, I have noted in my personal diary of 2010, with details of FD no., amount, date and date of maturity etc. The references are made in hand written on several pages in the diary These personal diary noting can be produced to prove the above statement.
Now the query is whether the said amount of Rs. 12.5 lakhs belonging to my brother will be exempted from the total taxable amount? Whether the evidence of my personal diary of 2010-11 extracts be acceptable as bonafide documents so as to exclude Rs. 12.5 lakhs from the total taxable income?

Query (3): Can receipts through cheque and DD's be considered as taxable income?
Please kindly clarify. Thanking you Sankaragiri