treatment of stock-in-trade after dissolution of partnership

n v mehta (tax consultant) (24 Points)

02 October 2008  

 A Partnership firm has been dissolved.  Stock-in-trade of the firm has been distributed among the partners.  The partners form another partnership firm and introduce the same stock-in-trade as capital contribution.  Does this transaction involve capital gain as  the status of the stock-in-trade has not been changed.