Because I got my VM corrupted I had to create new VM and installed all the software i.e. IIS, VS 2008 etc. After that I start deploying the web project I created in previous VM because I have taken backup before deleting previous VM.
When I have done with deploying web services and web apps I tried to access a web service to confirm that has everything configured properly. But when I browse my web service I got the above error.
I went into the IIS--> Virtual Directory properties checked all the tabs but everything was OK. I delete the virtual directory and recreated it in IIS but still the was there, then I open that web service in VS and run it. Web Service compiles successfully and run properly.
Then I an HTML page in that virtual directory and try to open it from the IIS and it opened. That time I realized there is something wrong with ASP.NET. I went to Google because that time I was scratching my head that what could the reason. After searching over the internet I found that this issue comes when ASP.NET version you are using in the application is not registered in the IIS Web Server Extensions. So I register ASP.NET version and error resolved.
Hope this post help you guys out there...