Boot Elementary iso from Ubuntu Grub2 - 4 simple steps

1. Copy the downloaded iso file in the desired location of your system.
Note: Here I have copied it into / location
2. sudo gedit /etc/grub.d/40_custom
copy the following content into the file and save it up.

menuentry "Elementary" {
set isofile="/elementary.iso"
loopback loop /$isofile
linux (loop)/casper/vmlinuz boot=casper iso-scan/filename=/elementary.iso noprompt noeject quiet splash
initrd (loop)/casper/initrd.lz}

3. sudo update-grub
4. Restart the system and choose the Elementary option in the Grub2 start up menu