During this time seal was also replaced. everything went back into place and we are living happily now 
7 Liters of ATF was used.
To check correct level of fluid it has to be run in every gear at optimum temperature and then level is to be checked on dipstick while engine is start. It should be between the hot side marks.
Checking ATF on cold engine with engine off tells you in the dip that oil is overfilled but it is not. Correct procedure of checking ATF is to be followed.
Also, to change ATF without opening up things, you need 12 liters of fluid, Procedure goes something like this
Opening drain bolt spills out around 2.5 liters
Add 2.5 of fresh fluid after putting drain bolt back on
Starting the engine and opening up upper oil cooler hose near radiator to let old fluid come out.
Engine has to be run for not more then a minute like this, this flows out around 2 liters of old oil out.
Same process has to be repeated until you get to see fresh red colored oil getting out of the cooler hose.
This is an expansive option as it takes 12 liters and on liter of original Toyota D-II costs 650 Rs.
Opening up the gear box requires 7 liters as illustrated above.
