This is a common problem and is mostly psychological. When you take practice tests, you cannot accurately simulate the testing environment. Even if you are able to simulate the physical environment, the mental environment is not the same as actually doing the real test. Think of golf. you can usually go on the golf range and hit the ball pretty well, but when you have one tee shot on the real course, with the rest of your foursome watching, it's not always easy to hit that one perfect shot. How do you improve? try to simulate as much of the actual testing environment as possible and try to imagine it's the real test, which could help trick your brain into the same stress you experience during the real thing. If you can get comfortable with stress similar to that of the real test, you should see your score improve. Once you sit for the real thing, RELAX. Think just the opposite--try to trick your brain into thinking it's a practice test only. Hope this helps.

Thanks Bryant for your suggestion!!!
I will definitely keep these points in my mind and will take more practice exams.

Actually, I did bad in my verbal section. Even if I was not tensed, during last few questions, I felt a bit restless, distracted and out of pace. I never took AWA tests at home and usually took longer breaks than what is allowed in real GMAT exam. Can that be a reason too?