If I am guessing (!) correctly, your input looks something like this:
<ChqDepAppSrvChequeScanComplete>
<CourtesyAmount1>100</CourtesyAmount1>
<FrontImageFilename1 t="String">R:in_simulatedImagesTempChequeImages100f001.bmp</FrontImageFilename1>
<RearImageFilename1 t="String">R:in_simulatedImagesTempChequeImages100r001.bmp</RearImageFilename1>
<RefuseReason1 t="String">None</RefuseReason1>
<CourtesyAmount2>200</CourtesyAmount2>
<FrontImageFilename2 t="String">R:in_simulatedImagesTempChequeImages200f002.bmp</FrontImageFilename2>
<RearImageFilename2 t="String">R:in_simulatedImagesTempChequeImages200r002.bmp</RearImageFilename2>
<RefuseReason2 t="String">None</RefuseReason2>
<NumberOfCheques t="Int32">2</NumberOfCheques>
</ChqDepAppSrvChequeScanComplete>
Your mistake is in the way you have built this expression:
<xsl:value-of select="concat(./CourtesyAmount,$i)"/>
There is no <CourtesyAmount>
node in your input, so you are concatenating nothing and $i, resulting in the current value of $i.
What you really want to do here is get the value from a node whose name is the concatenation of the string "CourtesyAmount" and the current value of $i. Something like:
XSLT 1.0
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="xml" version="1.0" encoding="UTF-8" indent="yes"/>
<xsl:template match="/ChqDepAppSrvChequeScanComplete">
<output>
<xsl:call-template name="loop">
<xsl:with-param name="limit" select="NumberOfCheques"/>
</xsl:call-template>
</output>
</xsl:template>
<xsl:template name="loop">
<xsl:param name="i" select="1"/>
<xsl:param name="limit"/>
<xsl:if test="$i <= $limit">
<Check>
<CheckAmount>
<xsl:value-of select="*[local-name()=concat('CourtesyAmount', $i)]"/>
</CheckAmount>
<FrontImage>
<xsl:value-of select="*[local-name()=concat('FrontImageFilename', $i)]"/>
</FrontImage>
<RearImage>
<xsl:value-of select="*[local-name()=concat('RearImageFilename', $i)]"/>
</RearImage>
</Check>
<xsl:call-template name="loop">
<xsl:with-param name="i" select="$i+1"/>
<xsl:with-param name="limit" select="$limit"/>
</xsl:call-template>
</xsl:if>
</xsl:template>
</xsl:stylesheet>
which when applied to the above input will result in:
<?xml version="1.0" encoding="UTF-8"?>
<output>
<Check>
<CheckAmount>100</CheckAmount>
<FrontImage>R:in_simulatedImagesTempChequeImages100f001.bmp</FrontImage>
<RearImage>R:in_simulatedImagesTempChequeImages100r001.bmp</RearImage>
</Check>
<Check>
<CheckAmount>200</CheckAmount>
<FrontImage>R:in_simulatedImagesTempChequeImages200f002.bmp</FrontImage>
<RearImage>R:in_simulatedImagesTempChequeImages200r002.bmp</RearImage>
</Check>
</output>
Note:
The real problem here is the input. It should not be formatted this way. Things would be much easier if the person ahead of you did a proper job and supplied you with a well-structured XML, for example:
<ChqDepAppSrvChequeScanComplete>
<NumberOfCheques t="Int32">2</NumberOfCheques>
<Cheque>
<CourtesyAmount>100</CourtesyAmount>
<FrontImageFilename t="String">R:in_simulatedImagesTempChequeImages100f001.bmp</FrontImageFilename>
<RearImageFilename t="String">R:in_simulatedImagesTempChequeImages100r001.bmp</RearImageFilename>
<RefuseReason t="String">None</RefuseReason>
</Cheque>
<Cheque>
<CourtesyAmount>200</CourtesyAmount>
<FrontImageFilename t="String">R:in_simulatedImagesTempChequeImages200f002.bmp</FrontImageFilename>
<RearImageFilename t="String">R:in_simulatedImagesTempChequeImages200r002.bmp</RearImageFilename>
<RefuseReason t="String">None</RefuseReason>
</Cheque>
</ChqDepAppSrvChequeScanComplete>
with none of this numbered nodes nonsense.
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