Definition of Sale :
Sale is transfer of ownership for money consideration. Section 54 defines sale as a transfer of ownership in exchange for a price paid or promised to be paid. Accordingly, the elements which are necessary to constitute a sale are as under -
A) Transfer of ownership, and
B) Money consideration.
Transfer of ownership -
Sale is a transfer of ownership. Ownership is absolute interest in the property. Therefore, in a sale there is transfer of all the rights in the property sold ; no right in respect of property are left with the transferor ( seller) . ownership means bundle of all the rights and liabilities of the property. So , when ownership is transferred, there is transfer of all the rights in a property by transferor to transferee .
B) Money consideration -
The ownership in the property must be transferred in exchange of money. That is to say, the transferor must receive some money from the transferee in return of the transfer of ownership of his property. The money in exchange of ownership is called 'price'
However, for a valid sale the amount of money is an irrelevant factor. It may or may not be adequate sum of money as compared to the market value of property.
Where ownership is transferred in exchange of ownership of some other property , the transaction is exchange.
When ownership is transferred without any consideration the transaction is called 'Gift'. And when ownership' is transferred for money consideration the transaction is valued ' sale'. However only the reference of money consideration is enough. Under section 54 the money consideration (price) need not to be paid at the time of transfer. It may be promised to be paid in future or some part of it may be paid immediately and the rest may be paid in future.