Everything settled after a hard work of more than 10 hours!
I pretty learned my lesson and I wanna share it you guys and I hope it'll really help.
First if you wanna update to a newer firmware, always have the current or any firmware prepared in your computer
in case of any mishap, there's always an alternate of DFU to recover it back.
As some of it was the fault of iTunes, I used my friends laptop to restore it back.
Normal restore ain't working but DFU in his computer worked like a charm.
It was a really frustrating day but it relieved me a lot when I settled it.
Few hours of Googling and few hours of attempt really fruit out the work.
Now it took time to synchronize it back but nevertheless I'm glad that my iPod is working now.
Also do some research before update your iPod to the latest firmware, who knows the latest wouldn't be as stable as the current one?Quite true...no matter what u're doing, always read and read 1st before attempting anything