Heat milk in a heavy bottom pan. Once the milk comes to a boil, switch off the flame and add water to bring down the temperature a bit. Add lemon juice till the milk curdles. Drain the curdled milk using a muslin cloth. You are now left with what is known as "chana" or "paneer".

Squeeze the muslin cloth to remove all the water from the chena. Take the chana in a plate and add cornflour to it.
Mash the chena with your hands for 10 minutes to make it soft and smooth. This is an important step to make sure that the rasgullas are soft.

Make small balls from the chena after the mashing is done. Meanwhile in a pan mix the sugar and water and let it boil at high temperature. Put the rasgulla balls in the boiling sugar syrup.