Dismissing the appeal of the revenue the Court held that the Assessing Officer had issued notices calling for explanations from the assessees as to why the excess stock should not be treated as “undisclosed investment” under section 69. In response to the notices, elaborate explanations were offered by the assessees, which were supported by consistent views by various Benches of the Tribunal and the High Courts. The Assessing Officer, upon consideration, had accepted the explanations and taxed the additional income as “business income” at 30 per cent. instead of 60 per cent. under section 115BBE. No contrary view either of any High Court or the Supreme Court had been placed to show that the explanations offered by the assessees were either perverse or contrary to law. There was no perversity or lack of enquiry on the part of the Assessing Officer so as to render his decision erroneous under Explanation 2 to section 263. No question of law arose.