Disability deduction under tax law fails where the assessee remains gainfully employed and cannot show substantial impairment.

Deduction under section 80U was available only where a permanent physical disability, other than blindness, substantially reduced the assessee's capacity to engage in gainful employment or occupation. On the facts, the assessee's deformity of the right wrist and fingers was supported only by a medical certificate, while he was actually employed as a senior assistant and earning salary. As no material showed that the deformity had materially impaired his ability to work or earn, the statutory condition for the deduction was not satisfied, and the claim failed.

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Issues: Whether the assessee, who was gainfully employed despite a deformity of the right wrist and fingers, was entitled to deduction under section 80U of the Income-tax Act, 1961.

Analysis: Section 80U(1)(ii) allowed the deduction only where a permanent physical disability, other than blindness, had the effect of substantially reducing the assessee's capacity to engage in gainful employment or occupation. The only material produced was a medical certificate showing the deformity. The assessee was in fact serving as a senior assistant and earning salary, and no material showed that the deformity had substantially impaired his capacity to work or earn.

Conclusion: The assessee was not entitled to deduction under section 80U of the Income-tax Act, 1961, and the answer to the reference was against the assessee and in favour of the Revenue.

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