How to Join Two Result sets to query on output came from Two statements
The problem that you are having is most likely coming from the tbl_sales because your item can appear in the table more than once.  When you then JOIN your tables together, you are returning the qty from tbl_purchases for each row in tbl_sales.

You can see this behavior by performing a SELECT on your tables:

SELECT e.*, p.qty purQty, s.qty salesQty
FROM tbl_matentry e
LEFT OUTER JOIN tbl_purchases p 
 ON p.item = e.eid
LEFT OUTER JOIN tbl_sales s 
  ON s.item=e.eid
ORDER BY e.eid;


See Demo. You will see in my sample, that the rupa qty appears twice because there are two entries in tbl_sales.

One way to get the result would be to calculate the TotalSold and TotalStock in subqueries:

select e.eid, 
  e.item,
  coalesce(p.TotalStock, 0) TotalStock,
  coalesce(s.TotalSold, 0) TotalSold,
  coalesce(p.TotalStock, 0) - coalesce(s.TotalSold, 0) BalanceStock
from tbl_matentry e
left join
(
  select item, sum(qty) TotalSold
  from tbl_sales
  group by item
) s
  on e.eid = s.item
left join
(
  select item, sum(qty) TotalStock
  from tbl_purchases
  group by item
) p
  on e.eid = p.item;


See SQL Fiddle with Demo.

This could also be written using a single subquery to tbl_sales:

select e.eid, 
  e.item,
  sum(p.qty) TotalStock,
  coalesce(s.TotalSold, 0) TotalSold,
  coalesce(sum(p.qty)) - coalesce(s.TotalSold, 0) BalanceStock
from tbl_matentry e
left join tbl_purchases p
  on e.eid = p.item
left join
(
  select item, sum(qty) TotalSold
  from tbl_sales
  group by item
) s
  on e.eid = s.item
group by e.eid, e.item, TotalSold;


See SQL Fiddle with Demo