Settlement of dues

DEAR SIR,

WE ARE PURCHASING OUR RAW MATERIAL FROM ABC CO. LTD.. & THERE IS A OUTSTANDING OF10 LACS IN THAT ACCOUNT (PAYABLE)

WE ARE SELLING OUR FINISHED PRODUCT TO XYZ CO. LTD.. & THERE IS A OUTSTANDING OF10 LACS IN THAT ACCOUNT (RECEIVABLE).

THE OWNER OF BOTH THESE COMPANIES IS SAME PERSON. NOW HE NEEDS TO SET OFF THIS10 LACS PAYABLE AGINST RECEIVABLE.

I.E.   ABC CO. LTD. DR.            10 LACS

   TO    XYZ CO. LTD. CR.         10 LACS

IS IT POSSIBLE?

DO WE NEED TO TAKE TRANSFER LETTER FROM THESE COMPANIES?

KINDLY ADVISE AT THE EARLIEST.