Image uploading not working in server
Below are the two ways. I hope help you to solve your issue.

1. 
Your files via FTP into the image_import directory aren't being given the correct permissions. You have to provide the permission i.e. chmod 660 * on them in the image_import directory the files were recognized correctly and the import worked.

OR

2.
In /includes/image.inc, change line 117 from:

  if (!is_file($file)) {


to:

if (!is_file($file) &amp;&amp; !is_uploaded_file($file)) {


Then check is your issue is solved or not. If not then try once updating below with second way :

On the admin/settings/file-system, try changing C:\WINDOWS\Temp to sites/default/files/temp (also made sure it was writeable by the web server).