Disallowance u/s40(a)(i) for non-resident payments found discriminatory under Article 26(3) DTAA; s.263 revision set aside

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....Whether the revision under s.263 validly set aside the reassessment hinges on two issues: (1) whether s.40(a)(i) as applied led to discriminatory treatment contrary to Article 26(3) DTAA; the Tribunal held that 100% disallowance for non-resident payments versus 30% for residents constitutes less favorable treatment and thus breaches the non-discrimination clause, rendering full disallowance impermissible - outcome: 100% disallowance is discriminatory. (2) whether the AO's order was erroneous and prejudicial to revenue; because the AO applied a 30% disallowance consistent with the DTAA principle, the revisional jurisdiction under s.263 was not properly invoked - outcome: s.263 action set aside in favour of the assessee. - ITAT....