Why Shia pray with their hands/arms down and while sunnai Muslim pray with their hands closed. How our prophet Mohammad (SAW) used to pray. Please if possible give me reference of books which I can also go through.

While performing salat you will see that a lot of Muslims hold their hands in different positions while in qiyam (standing position). Some will fold their hands across their chest, some by their navel, and some let their hands hang by their sides. You probably asked yourself, “Why do they do these things?” Let us first look at the word qiyam. This word when looked up means: upright, erect. When you stand upright your arms should be straight as well. If your arms were folded then your body would be in qiyam but your arms would not be. To have the whole body erect would be the position of qiyam. According to The Five Schools of Islamic Law by Muhammad Jawad Al-Mughniyyah, all the 4 Sunni schools and the Shia school agree that holding the hands by the side is permissible. None of them states that takkatuf is obligatory.[1] The Shia scholars say that takkatuf will void your salat, because it is a later bidah.[2]

Placing the right hand over the left hand while standing in prayer is what is called Takattuf.

We find that Imam Ali (as) said “The believers should not put one hand on the other during standing erect in prayers like the disbelievers.”[3]

Al-'Allamah ibn al-Mutahhar al-Helli says in Tathkirat al-Fuqahaa: al-Takkatuf invalidates the prayer and it is placing the right over the left during recitation and the scholars of the Shia sect agree on this—al-Sheikh and al-Murtada both said—al-Baqir (as) said: "And do not make Takkatuf (placing right over left), for it is something that the Zoroastrians do."

Also Muhammad bin Muslim asked one of the Imams about the man who places in prayer his right hand over his left. He (as) replied: "That is (called) al-Takkatuf, do not do it."

Al-'Allamah Muhammad Hassan Najafi who was the head of the Shia sect in his time says in Jawahir al-Kalam:

“It was said about 'Umar that when they brought him the prisoners from the non-Arabs ('Ajam), they did Takkatuf (placing right over left) in front of him, so he asked about it and they told him that they did this as a sign of submission in front of their Kings, so he saw that it was good to do it for Allah in prayer but did not pay attention to the unpleasantness of imitating the Zoroastrians in Shari'ah.”

al-'Allamah Najm-ul-Deen al-Tibsi says in Al-Irsaal wal-Takkatuf bayn al-Sunnah wal-Bid'ah pg.13-14:

“There are many narrations from Ahl ul-Bayt (as) prohibiting al-Takkatuf and describing it as being from Zoroastrianism”

And he also said on pg.18-19:

“It was said that it was innovated by the Caliph 'Umar bin al-Khattab, he took it from the non-Arab prisoners.”

Ayatollah Sayed Sadiq al-Shirazi said in Sharae'e al-Islam by al-Helli, #235:

“It is what is called ‘al-Takattuf’ and al-Takkatuf that the 'Aamah (Sunni’s) practice, following the path of 'Umar bin al-Khattab, and 'Umar had taken it from the Zoroastrians then inserted it into salat, this was one of his innovations and it was never done by the Prophet (sawa) nor his Ah ul Bayt (as).”

Grand Ayatullah al-Khoei says in Kitab al-Salat vol. 4 pages 445-446:

“It is no secret that the act of Takkatuf was never practiced during the time of the great Prophet (sawa), even though it was narrated through several chains that do not come through us (Shia) thus they are all fabricated and false. Then we should not be hesitant to class it as one of the later innovations after his time. As for the time of the first caliph as it is said or most probably the second as we see in the narration, that when they brought the Persian prisoners to 'Umar, and he saw them in that state so he asked for the reason and they answered that this is what they do in front of their kings to glorify them, so he was pleased with it and ordered that it be done in prayer as Allah is more worthy of praise.”

[1] The Five Schools of Islamic Law” by Muhammad Jawad Al-Mughniyyah page 91

[2] An unlawful and unauthorized addition into the religion

[3] Tuhaf al-Uqoul pg 127

Mystery of the Shia by Maulana Sheikh Mateen pages 70-72