Unable to build image using Dockerfile

Hello all,
I am trying to build an image.The docker file looks something like this

FROM scratch
ARG VERSION=0.3
COPY --from=another/image/source/test:${VERSION} /folder/ /new_folder/

To simplify the issue, I am getting an image at COPY instruction. It is failing and saying invalid reference format. The image source from where I am trying to copy exists and works fine individually with a FROM instruction (i.e FROM another/image/source/${VAR})

Can COPY not work with an argument in a form parameter? Or is there something I am missing?
Thank you in advance for all the guidance.