What ? Installing Windows without USB drive or DVD ? That’s crazy !

Yes, it sounds crazy but, it’s possible. Here’s how you do it :

 1. Boot the OS which you want to Upgrade/Replace.
For example, if you have a dual-boot system of Window 8.1 and Windows 7 and say you want
to Upgrade Windows 8.1 to Windows 10, then you need to boot Windows 8.1 .
Don’t proceed otherwise.  

   2.  Open/Mount (Right click -> Mount ) the ISO with any archiving software (Ex : WinRAR, Power-ISO etc ).

   You can also open it directly from File Explorer by Double-Click if you are using Windows 8 or higher OS.
3. Copy all the files (See image below) in the ISO to any folder on any drive OTHER THAN the one  on which your current OS is installed. (Usually C: ).
Image : Files to be copied

For example, you can copy them to a  D:\WindowsInstall (Unless D: is your boot partition )
4. After copying everything, go to the destination folder. In the previous example, it’s D:\WindowsInstall
From there, run a file called Setup.exe (Again, refer image above). Follow On-Screen instructions from here.
That ends our tutorial. Hope you liked it !.
P.S : Since this procedure follows the same logic involved in creating boot-able USB, I’ve omitted minor details for reading convenience. If you have any questions, please comment !
Thanks !