I think the query syntax you have written is not correct as per the MYSQL syntax.
If the first expression is not null it returns the first expression result,else the second one.
the query could be..
ifnull((SELECT LoanAmt FROM tblextraloan where pno = '0706' as L),(SELECT LoanAmt FROM tblborrowloan where pno = '0706' as L));
for more details refer this below link.
http://dev.mysql.com/doc/refman/5.0/en/control-flow-functions.html#function_ifnull[
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