Ipswich Town beat Leeds United 1-0 at Elland Road yesterday evening, thanks to a Tommy Smith header.
Byram went down in the penalty area, when well placed, to try and win his side a spot-kick, but his appeals were turned down.
It was a decision that McCarthy felt was incorrect at first viewing, but after seeing a replay he has commended the official for his bravery and questioned Byram's decision to go down easily, rather than to try and take a shot on goal.
“I thought it was a penalty when I first saw it but I looked at it after and it was a brilliant decision by the referee and a brave one," McCarthy said.
"I have no idea why he went down because he is in on goal but it wasn’t a penalty.”
Ipswich bounced back from two defeats on the trot at Elland Road last night, with Tommy Smith's first-half header proving the difference between the two sides.
It was a disappointing night for Leeds, who didn't create too many opportunities during the match, and were handed their first defeat of the season as a result.
The Whites have been tough to beat so far this season, but they were far short of their best last night and McCarthy's side will feel they were deserved victors.
It moves Ipswich back into the play-off positions in the early Championship table, while Leeds currently occupy 14th place.