Please Help: Loans credit and debit adjustment entry allowed in it act

One of the it assessess cash loan from creditor ledger balance rs:10 lacs cash loan to debtors ledger balance rs:12 lacs show in books as on dt:31-03-23.
Doubt: creditor outstanding ledger balance transfer to debtor outstanding ledger balance adjustment entry passed in books dt:20-6-23 allowed in it act and penalty applicable.