Hi Uday,
If the xml payload is carrying the values as expected then that means your IDoc target is expecting the iso-8859-1 encoding but the PO system is sending it as utf-8. The characters that you see in the IDoc are what you would get if you took the bytes that you would get from utf-8 encoding but then tried to display the characters in iso-8859-1 instead.
Regards,
Ryan Crosby