After debug and comparing sample ICS format, I found that iOS7 does not line multiline description part in the ICS file. I have changed the description to just one line (without any new line chars, see below). iOS 7 started recognizing the file and happy to open it. I am still researching how to add multiple lines of description, because it shows in email body of outlook on windows. Weird but at least know what was causing problem.
DESCRIPTION:My Sample Meeting