Physical disability deduction under section 80U upheld where severe deafness impaired gainful employment despite substantial income.

Relief under section 80U was available where physical disability substantially impaired gainful employment capacity, and substantial income alone was not decisive against eligibility. On the facts, the assessee's deafness was severe enough that he could not hear from a distance of 2-3 feet even with a hearing aid, so he qualified in law for the disability-based deduction.

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Issues: Whether the assessee was entitled to relief under section 80U of the Income-tax Act, 1961 on account of physical disability.

Analysis: The assessee had claimed deduction under section 80U as a physically handicapped person. The Court noted that substantial income by itself is not decisive in determining whether the disease or disability has reduced a person's capacity for gainful employment. On the facts, the assessee suffered from deafness to such an extent that he could not hear from a distance of 2-3 feet even with the aid of a hearing aid.

Conclusion: The assessee was entitled in law to relief under section 80U of the Income-tax Act, 1961.

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