query regarding proprietorship concern

A company- private or public can become member of another company. It may become a partner in a partnership firm. But a company becoming a proprietory to another sole trading concern may not be possible.

will u pls refer the section of naything else where it is stated that a Co. can not become a proprietor of any other concern

I could not give you any sections. But my humble submission is that we have been taught by our company law gurus that a company is a separate legal entity distinct from its members ( Solomon Vs. Solomon & Co.,). So in a way a company itself is a sole proprietor for its business and taxable for the income which has to be payable out of its own funds. If it starts a business under a sole trading concen then automatically it  also comes under its entity and taxable under the same PAN. Views are expected form experts. But in your case the separate product can be done through a separate  DIVISION of the company. I know one company is engaged in providing corporate solutions(consultancy) activitiy and run a separate management training activity  under a separate division and have two different Service tax code numbers but taxable to income tax under same PAN number.