Hi Hari,
Based on all supplied information it's clear for me that the basis configuration/settings are probably not OK. I read on SCN also various discussions where always the suggested solution was a restore of the source system. I advise you to let the Basis Team do that once more.
Last but not least, you might want to have a look at SAP Note 1313068 - tRFC transfer of pure IDoc hierarchies to PSA.
Best regards,
Sander