Dear Mahendra,
It is not a case of transfer but by deputation. It is settled by the Apex Court in Manager, M/S. Pyarchand vs Omkar Laxman Thange & Ors on 27 September 1968:
"The general rule in respect of the relationship of master and servant is that a subsisting contract of service with one master is a bar to service with any other master unless the contract otherwise provides or the master consents. A contract of employment involving personal service is incapable of transfer."
If you treat it as a transfer, then many issues like PF settlement dues settlement, etc., would arise, and above all, service tax may have to be paid in terms of the following decision:
In GUJARAT HC, TAX APPEAL NO. 138 of 2014, the issue was whether the respondent is a Manpower Supply Recruitment Agency. In order to reduce its cost, the respondent deputed some of its employees to its group company, who were also engaged in similar businesses. The reason for such deputation was also on certain occasions stipulated work arising for a limited period. It was held that in order to reduce the cost of manufacturing, the company deputed some of its staff to its subsidiaries or group companies for stipulated work for a limited period. All throughout the control and supervision remained with the respondent. As pointed out by the respondent, the company is not in the business of providing recruitment or supply of manpower. The actual cost incurred by the company in terms of salary, remuneration, and perquisites was only reimbursed by the group companies. There was no element of profit or financial benefit. The subsidiary companies could not be said to be their clients. The deputation of the employees was only for and in the interest of the company. There was no relation of agency and client. It was pointed out that the employee deputed did not exclusively work under the direction of supervision or control of the subsidiary company. All throughout he would be under the continuous control and direction of the company.
Regards,
Sushil