Hey guys,
after a lot of study I finally got answer to my own question. Following link I found really helpful.
http://scn.sap.com/docs/DOC-45574
It does answer following questions:
1. I don't understand how system will create a SO out of IDoc created in earlier step?
2. Is there any SD configuration missing from SD side?
3. is there any Exit involved which converts IDoc created in earlier step to SO ?
Regards,
Nikhil GHadge.