In case of drawings from OD a/c,is interest on OD allowable?

partner's drawing is capital expenditure for the firm, and partners are eligible to draw upto their capital investment., without any specified criteria of funds are overdraft or loan, interest on such overdrafts are business expenditure,  

Yes interest paid on loan or OD A/c is deductible from business income.

As per section 2(28A) interest means interest payable in respect of moneys borrowed or debts incurred. Interest on OD represents interest on moneys borrowed and if such moneys borrowed is used for the purpose of business or profession then interest is allowed as deduction u/s 36(1)(III)