Q. Where does the Gemara say a Ben Pakua is Mutar to eat?

A. Ben Pekuah is the live offspring of a Kosher pregnant animal found inside of the properly slaughtered parent after the Shechita. The Talmud (Chulin 74a, 69a) explains why and in which situations it is permitted without undergoing shechita, and quotes a biblical source (Vayikra 11: 3).
Shulchan Aruch (Y,D. 13: 2) and other Halacha sefarim explain further details. See Rambam (H. Macholos Assurim 5: 6).
See also question 984 in regards to mass-producing Ben Pekuah meat.

Rabbi A. Bartfeld as revised by Horav Shlomo Miller Shlit’a