Merge two images of different sizes leaves black color in a smaller image

I am using C#. I've two images as following:

Image1: 200 X 100 Image2: 200 X 200

I tried merging it with Canvas, Graphics and Pixel methods and all work but with a glitch that开发者_C百科 it leaves black color in that 100 pixel area of image1 height.

I prefer to have that area as complete transparent instead of black color.

Here's the url for the merged image I'm referring to: Image Url

I highly appreciate your pointers on this. Many thanks in advance!

I was saving the final image as .jpg and that was creating that issue. I then saved it in .png and bingo, problem is solved.

Many thanks folks!