When I have installed this component in my local computer it is uploaded with some error n shown like timeout but then also it was uploaded but now when I try to upload it on my site its displaying error like "The server encountered an unexpected condition which prevented it from fulfilling the request.
The script had an error or it did not produce any output. If there was an error, you should be able to see it in the error log.
As I already said... this is a permissions or a server problem, you need to either enable the FTP layer in Global Configuration and reinstall, or if it still isn't working then use the manual upload-to-FTP-folder then install-from-folder instead of the direct install-from-uploaded-zip method.
With your supreme Joomla knowledge you should have already known that - It's clearly stated in the docs as the failsafe method for picky or paranoid-security servers.
Oh - do you use sh404SEF? Incase you do, I sometimes have trouble with the Flood Prevention setting breaking component install, but setting it to 10/10 seems to be a fair setting.