For once, this is definitely not a Magento issue, it’s the image itself. Opening this in Photoshop, it looks exactly as on your site.
I quickly selected and removed the white on the outline, see attachment. Not perfect, but probably closer to what you expected.
Oh sorry, now I see you wanted everything white in the background! No transparency. Well, turn off transparency then ...
Cheers, Ralf.

Click thumbnail to see full-size image