Solving the Arithmetic Word Problems (AWPs) using AI techniques has attracted much attention in recent years. We feel that the current AWP solvers are under-utilizing the relevant domain knowledge. We present a knowledge- and learning-based system that effectively solves AWPs of a specific type—those that involve transfer of objects from one agent to another (Transfer Cases (TC)). We represent the knowledge relevant to these problems as TC Ontology. The sentences in TC-AWPs contain information of essentially four types: before-transfer, transfer, after-transfer, and query. Our system (KLAUS-Tr) uses statistical classifier to recognize the types of sentences. The sentence types guide the information extraction process used to identify the agents, quantities, units, types of objects, and the direction of transfer from the AWP text. The extracted information is represented as an RDF graph that utilizes the TC Ontology terminology. To solve the given AWP, we utilize semantic web rule language (SWRL) rules that capture the knowledge about how object transfer affects the RDF graph of the AWP. Using the TC ontology, we also analyze if the given problem is consistent or otherwise. The different ways in which TC-AWPs can be inconsistent are encoded as SWRL rules. Thus, KLAUS-Tr can identify if the given AWP is invalid and accordingly notify the user. Since the existing datasets do not have inconsistent AWPs, we create AWPs of this type and augment the datasets. We have implemented KLAUS-Tr and tested it on TC-type AWPs drawn from the All-Arith and other datasets. We find that TC-AWPs constitute about 40% of the AWPs in a typical dataset like All-Arith. Our system achieves an impressive accuracy of 92%, thus improving the state-of-the-art significantly. We plan to extend the system to handle AWPs that contain multiple transfers of objects and also offer explanations of the solutions.