Capital gain computation

sivasubramanian (articled assistant) (79 Points)

31 July 2010  

A property has been sold consisting of land and a super structure (2 floors). Initially ground floor was constructed and the assessee holds the property in same state for more than 36 months. Then he constructs two floors (I think it will b considered as cost of improvement) and within 1 year from constructing the two floors sells the property. Is it right if land & ground floor is considered as long term capital gain and the improvement in the property (2 floors)  is considered as short term capital gain (since not held for more than 36 months)?  If no can I claim indexation for cost of improvement? Also please provide me if there is any decided case laws or clarification from the department regarding this issue.