It's been so many days i have been spending my time trying to figure out how to import products using CSV in Magento.
I recommended client to go for better server and as a result we moved to VPS. But that didn't help. Hosting company was so generous to work along with me to figure out what was actually wrong. They also spent many hours and haven't charged for VPS yet and I am free to use the server as I need. But I am not that good in server settings, but learnt a lot along the way :)
ini_set('memory_limit', '128M');