public void CopyFeatures(string srcFile, string srcDir, string outFile, string outDir)
{
    IWorkspaceFactory workspaceFactory = new ESRI.ArcGIS.DataSourcesFile.ShapefileWorkspaceFactory();
    IWorkspace workspace = workspaceFactory.OpenFromFile(srcDir, 0);
    IFeatureClass featureClass = ((IFeatureWorkspace)workspace).OpenFeatureClass(srcFile);
    IFeatureCursor featureCursor = featureClass.Search(null, false);
    IFeature feature = featureCursor.NextFeature();

    IWorkspace outputWorkspace = workspaceFactory.OpenFromFile(outDir, 0);
    IFeatureClass outputFeatureClass = ((IFeatureWorkspace)outputWorkspace).CreateFeatureClass(outFile, featureClass.Fields, null, null, esriFeatureType.esriFTSimple, "Shape", "");

    IWorkspaceEdit workspaceEdit = ((IDataset)outputFeatureClass).Workspace as IWorkspaceEdit;
    if (!workspaceEdit.IsBeingEdited())
    {
        workspaceEdit.StartEditing(false);
        workspaceEdit.StartEditOperation();
    }

    IFeatureBuffer outputFeatureBuffer = outputFeatureClass.CreateFeatureBuffer();
    IFeatureCursor outputFeatureCursor = outputFeatureClass.Insert(true);

    while (feature != null)
    {
        for (int i = 0; i < outputFeatureBuffer.Fields.FieldCount; i++)
        {
            IField field = feature.Fields.Field[i];
            string myName = field.Name;
            if (field.Editable == true)
                outputFeatureBuffer.Value[outputFeatureBuffer.Fields.FindField(myName)] = feature.Value[feature.Fields.FindField(myName)];
        }

        outputFeatureCursor.InsertFeature(outputFeatureBuffer);
        ReleaseComReferences(feature);
        feature = featureCursor.NextFeature();
    }
    outputFeatureCursor.Flush();
    if (!ReferenceEquals(workspaceEdit, null))
    {
        workspaceEdit.StopEditOperation();
        workspaceEdit.StopEditing(true); // This line causing the increase in memory but the same memory doesn't get released.
        ReleaseComReferences(workspaceEdit);
    }

    ReleaseComReferences(featureCursor);
    ReleaseComReferences(workspace);
    ReleaseComReferences(featureClass);
    ReleaseComReferences(outputFeatureCursor);
    ReleaseComReferences(outputFeatureBuffer);
    ReleaseComReferences(outputWorkspace);
    ReleaseComReferences(outputFeatureClass);
    ReleaseComReferences(workspaceFactory);
}

public void ReleaseComReferences(object refernce)
{
    if (refernce != null)
    {
        int refsLeft = 0;
        do
        {
           refsLeft = System.Runtime.InteropServices.Marshal.ReleaseComObject(refernce);
        }
        while (refsLeft > 0);
    }
}