Police have arrested the accused and today obtained his 10-day physical remand from a sessions court.
Nasir Iqbal, a resident of Chak Bholu village of Gujrat district, some 200 kilometres from Lahore, told police that he had a water dispute with Mustafa Ghaus of his locality.
On July 21, he said Mustafa "abducted" his son Tabassum and took him to a water pumping machine where he severed the boy's arms through its petter engine.
The accused threw the boy on the road in a critical condition.
A passerby shifted him to the Aziz Bhatti Shaheed Hospital where his condition is stated to be out of danger.
Police arrested the accused yesterday when the local media reported the matter and subsequently Punjab Chief Minister Shahbaz Sharif took notice of the incident.
Today Sharif visited the hospital and enquired after the health of the boy.
He also suspended the station house officer of the police station concerned for delay in registration of FIR and medical superintendent of the hospital for not taking proper care of Tabassum.
Mustafa confessed to his crime before police saying he cut off Tabassum's arms because he had stolen his goat.
"I wanted to teach him a lesson for his crime," a police official quoted Mustafa as having said.
A case has been registered against him under sections 324 and 334 of the Pakistan Penal Code.