Assessee claimed that it was eligible for tax credit qua tax which, though payable on income by way of dividend, received from its subsidiary in Thailand, was not paid because of statutory regime operating in that country. Assessing Officer  contended that because tax was not paid by assessee, it could not be granted tax credit on dividend income, which was otherwise taxable in India at rate of 30 per cent.  CIT(A) affirmed the order of the Assessing Officer. Tribunal held that the assessee  would be entitle to tax credit at the rate of 10 percent on the dividend income received from the Thai subsidiary. On appeal by the Revenue  the Court held that article 23 of India-Thailand DTAA, credit for notional tax was granted as a fillip and/or to incentivize economic development/activity which was a decision taken by treaty partners and unless there was ambiguity, interpretation of expressions ‘Thai tax payable’ or ‘Indian tax payable’ was to be based on a plain reading of what was provided in article 23(3) and 23(5). Said provisions exemplify mutuality of interests in giving stimulus to investment for securing economic development in both countries. Concept of tax sparing was embedded in several DTAAs executed by India, such as with France, Jordan and Oman, apart from Thailand-Insofar as India-Thailand DTAA was concerned, credit for tax sparing worked for residents of Thailand, as well as India. This was a mechanism which was engrafted in DTAAs to incentivize investment for economic development and interdiction of such provisions would be detrimental to larger public interest. Therefore, Tribunal was right in allowing tax credit to assessee on its dividend income from Thai subsidiary based on concept of ‘tax sparing’.  (AY. 2010-11 to 2013-14)