Remove VALUES keyword from your query.
Refer this
CREATE TABLE [Customers](
[CustomerId] [int] IDENTITY(1,1) NOT NULL,
[CustomerName] [varchar](50) NOT NULL,
[City] [varchar](50) NULL,
CONSTRAINT [PK_Customers] PRIMARY KEY CLUSTERED
(
[CustomerId] ASC
)WITH (PAD_INDEX = OFF, STATISTICS_NORECOMPUTE = OFF, IGNORE_DUP_KEY = OFF, ALLOW_ROW_LOCKS = ON, ALLOW_PAGE_LOCKS = ON) ON [PRIMARY]
) ON [PRIMARY]
GO
CREATE TABLE [Customers2](
[CustomerId] [int] IDENTITY(1,1) NOT NULL,
[CustomerName] [varchar](50) NOT NULL,
[City] [varchar](50) NULL,
CONSTRAINT [PK_Customers] PRIMARY KEY CLUSTERED
(
[CustomerId] ASC
)WITH (PAD_INDEX = OFF, STATISTICS_NORECOMPUTE = OFF, IGNORE_DUP_KEY = OFF, ALLOW_ROW_LOCKS = ON, ALLOW_PAGE_LOCKS = ON) ON [PRIMARY]
) ON [PRIMARY]
GO
INSERT INTO [Customers]([CustomerName],[City]) VALUES ('Jhon','Perth')
GO
INSERT INTO [Customers]([CustomerName],[City]) VALUES ('Kabir','Delhi')
GO
INSERT INTO [Customers]([CustomerName],[City]) VALUES ('Smith','Cape Town')
GO
INSERT INTO [Customers]([CustomerName],[City]) VALUES ('Jack','Johannesburg ')
GO
INSERT INTO [Customers]([CustomerName],[City]) VALUES ('Micheal','Johannesburg ')
GO
INSERT INTO [Customers]([CustomerName],[City]) VALUES ('Kallis','Johannesburg ')
GO
INSERT INTO [Customers2]([CustomerName],[City])
(SELECT CustomerName,City FROM [Customers]
WHERE City = 'Johannesburg')
SELECT * FROM [Customers2]
