This piece is made by attaching knitted sleeves to a sleeveless top. Initially the sleeves were knitted with a lacy pattern. The sleeves were shaped appropriately while knitting.
Later, loops were stitched on the sleeveless top at the armhole.
The knitted sleeve was grafted over to these loops on the armhole of the sleeveless top using tapestry needle.
This process is demonstrated in the following YouTube video.
https://youtu.be/WA3eneNRLvc