sushant:
i used the I2C scanner from herehttp://arduino.cc/playground/Main/I2cScanner, the scan suggests that device is connected at 0x38 but still i'm not getting any display on the LCD using this address?
Can you please post the code you're using to drive the LCD?
Have you tried connecting LED's to the PCF8574AP instead of the LCD. These will give you a better visual indicator that the PCF8574AP is functioning as expected before moving onto the debugging the LCD.