The (VAR) system was used to rule out a goal in the Champions League for the first time in last 16 game between Ajax and Real Madrid.
Tadic was deemed to be interfering with Real goalkeeper Thibaut Courtois after the Belgian spilled a header at a corner and Tagliafico nodded in the rebound.
UEFA later confirmed why the decision was taken.
"The referee identified that Tagliafico's team-mate Dusan Tadic was in an offside position and interfering with the goalkeeper -- preventing him from playing or being able to play the ball -- as the header was being made," said UEFA on Twitter.
"This was in line with VAR protocol and the goal was correctly overturned and a free-kick given for offside."
The VAR system, widely used during last year's FIFA World Cup, and now called upon in most of Europe's leading leagues, is making its Champions League debut after it was introduced for this season's knockout stages.
VAR was initially set to be rolled out in the Champions League from the start of next season, but the decision to bring forward its use follows lobbying from top European clubs.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)