Police claimed at the time that Fransch, 20, killed himself in a handgrenade blast after a task force from the Peninsula riot unit, led by Major Charles Brazelle, surrounded his Church Street house.
Fransch's neighbour Basil Snayer however told the commission a different story on Thursday. He said he had seen a policeman lying on the roof of Fransch's house just minutes before the explosion.
"It looked as though he was trying to catch something or throwing something. Immediately afterwards there was a loud explosion and everything went quiet," Snayer said.
"My impression was that the time lapse beween the arm action and the explosion indicated that an explosive device could very well have been hurled through the window. But I cannot say for certain that is what happened."
When he entered the room where the grenade had exploded, he found blood-spattered pieces of clothing and flesh plastered on the floor and ceiling.
He said he had agreed to testify before the commission so that the truth of what happened on the morning of November 17, 1989 could be uncovered.
"A brave soldier died in the service of his country. I do not believe there was any intention on the part of the police to take any prisoners.
"I am convinced that if the will was there Anton could have been gassed out or starved out."
Earlier Snayer described his family's "night of terror" after police, allegedly acting on a tip-off from Fransche's "accomplice", turned their quiet suburb into a war-zone.
He said Brazelle had refused to allow him to take his wife and four children to safety. Instead, heavily-armed policemen took up position in his kitchen and bathroom and opened fire on Fransch's house.
"The gunfire sounded as if the house was blowing up. I heard voices outside shouting: `Come out you pig. Today you are dead'."
He estimated about 35 to 40 policeman had surrounded Fransch's house. The grenade explosion ended an episode in his family's life which they would never forget.
"Without the truth of what happened we cannot start healing. Those responsible for the attack need to come forward and account for their actions. The police turned a residential area into a war zone."
According to background information supplied by the commission, Fransch was understood to be an MK guerialla who disappeared in September 1986 after appearing on the "Police File" television programme.
Before his disappearance, he was a student leader who was detained several times during 1985 and 1986.
His funeral was held in 1989 at Bonteheuwel Metropolitan stadium. Messages of support came from various political organisations as well as Umkhonto we Sizwe officials in exile.