Unable to show the Uploaded Image by the user in user submitted form for node
In Drupal 7 you can use system_retrieve_file() 


  As system_retrieve_file function will download a file from a remote
  source, copy it from temp to a specified destination and optionally
  save it to the file_managed table if you want it to be managed.


Can you try this Save image from URL to a field from a custom module