I want to know how 1 can distinguish that the website is hit by which update, either the site is hit by manual update or Algorithm update and if it is by algorithm update, then which algorithmic update has hit it.
Don't think of it as a series of separate, independent updates.
Google has an algorithm*. It's huge. Periodically, bits of it are altered and (in theory) improved. That happens more or less every day. Some changes are very minor, some changes are more significant. Every now and then, a change is so important that it gets a name. But what does that matter? Once it's changed, it's just part of The Algorithm. Even named changes aren't just one-offs. "Panda" was the name given to a series of changes that were rolled out over a 2½ year period from February 2011 to July 2013.
If you are worried about your site being affected by an algorithm change, the two things to consider are:
1 - are you doing anything that Google tells you not to do? If so, you are at risk of being hit by a change.
2 - have you seen a sudden drop in your rankings? If so, you might have been hit by a change.
Re 2: just because you've taken a drop doesn't mean that it was an algorithm change that caused it, at least not directly. It could be that one of your competitors had a surge and raced ahead of you. You might not have done anything wrong or lost any googlejuice, but you've fallen behind other sites because they're running while you're walking.
If you have seen a big drop, have a look at when it happened, and see if it matches any of the dates at http://moz.com/google-algorithm-change. That can give you a clue if that might have been what was behind it.
* algorithm defn: former US vice-president on drums
The best way you can find that out is trough a significant drop in your ranking.
As someone mentioned above, having your ranking dropped does not necessarily mean that your site has been hit by a recent update. But, if you find out that your ranking has stuck to where it was after being dropped for months this may be a clear indication that your site has been penalized.
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