Home loan for reconstruction/extension.

yes, you can

1. Deductions of interest and deductions with respect to principal repayment will be dealt u/s 24(b) and sec 80C respectively. 
2. According to sec 24(b), interest on borrowed capital will be allowed as deductions when the borrowed capital was utilized for acquisition construction, renovation, repairs or reconstruction. If it is been obtained for building an additional floor it will be considered construction and resultantly sec 24(b) will be available.
3. Repayment of the principal portion is dealt in sec 80C(2)(xviii) which imposes only one condition under sec 80C(5)(iii) where the property referred to in the above section and repayment of principal was availed under this section then the property cannot be sold within a period of 5 years from the date of possession obtained by the assessee. So there is no restriction for claiming the principal repayment u/s 80C if the loan was obtained for the purpose of construction of the additional floor. 
Please correct me if the above solution has an alternative view. 

I have mentioned it as an additional floor since you have asked for an extra room. However, the provision remains the same with respect to can claim deductions.

I think I have erred in saying the principal portion can be availed as the deduction for construction of the additional room.  From a plain reading of sec 80C(5)(iii), they have clearly mentioned as possession of the property which says that it should be a new property constructed or acquired. Going by this view principal portion will not be allowed as deduction u/s 80C.

Please correct me if the above solution has an alternative view.

No, it cant be.