Thanks for update matrixmadhan. Even though after making suggsted changes I still get same error message. Now my code looks like :

find ${COPY_DIR} -type f | while read N
do
mkdir -p "${BACKUP_DIR}/`dirname $N`"
gzip < "$N" > "${BACKUP_DIR}/$N.gz"
done

Error message

/backup/sidora/iAS/ifs1.1/doc/Quick Tour/Graphics/rtarr.gif.gz: cannot create