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Construction on plot of land by a pvt ltd company

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(Querist)
21 January 2019 Suppose a Pvt Ltd company has a plot of land which was purchased for Rs 50 Lakhs few years back. Now the company started the construction on the same plot of land and completed the same in the said year (Total construction cost is Rs 70 Lakhs). Should the company show this in the books as:
1) Land & Building for 120 Lakhs or
2) Both asset as separate asset ( Land = 50 Lakhs and Building = 70 lakhs )

Also advice if second alternative is adopted depreciation is to be charged at 70 lakhs only?

Please advice the treatment from both income tax and company law perspective.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
21 January 2019 Show Both asset as separate asset ( Land = 50 Lakhs and Building = 70 lakhs ) and depreciation is to be charged on 70 lakhs only.
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