function form_example_form($form, &$form_state)
{

    drupal_add_js(drupal_get_path('module', 'form_example') . '/js/test.js');

    $form['price_form'] = array(
        '#type' => 'fieldset',
        '#title' => t('Add Item'),
    );

    $form['price_form']['item'] = array(
        '#type' => 'textfield',
        '#title' => 'Item Name?',
        '#size' => 10,
        '#maxlength' => 25,
        '#required' => TRUE,
        '#ajax' => array(
            // #ajax has two required keys: callback and wrapper.
            // 'callback' is a function that will be called when this element changes.
            'callback' => 'form_example_simplest_callback',
            'wrapper' => 'listDiv',
            'effect' => 'fade',
        ),
    );

    $form['price_form']['textfields'] = array(
        '#prefix' => '<div id="listDiv">',
        '#suffix' => '</div>',
    );

    $form['textfields']['items'] = array(
        '#markup' => '',
    );

    $form['price_form']['price'] = array(
        '#type' => 'textfield',
        '#title' => 'Item Price?',
        '#size' => 10,
        '#maxlength' => 10,
        '#required' => TRUE,
    );

    $form['price_form']['submit_button'] = array(
        '#type' => 'submit',
        '#value' => t('Click Here!'),
    );
    if (!empty($form_state['values']['item'])) {
        $result = db_query("SELECT * FROM {item} where item_name='" . $form_state['values']['item'] . "'");
        if ($result->rowCount() != 0) {
            $form['textfields']['items'] = array(
                '#markup' => 'Already exist',
            );
        } else {
            $form['textfields']['items'] = array(
                '#markup' => 'New Item',
            );
        }
    }

    return $form;
}

function form_example_simplest_callback($form, $form_state)
{
    return $form['textfields'];
}

function form_example_form($form, &$form_state)
{

    drupal_add_js(drupal_get_path('module', 'form_example') . '/js/test.js');

    $form['price_form'] = array(
        '#type' => 'fieldset',
        '#title' => t('Add Item'),
    );

    $form['price_form']['item'] = array(
        '#type' => 'textfield',
        '#title' => 'Item Name?',
        '#size' => 10,
        '#maxlength' => 25,
        '#required' => TRUE,
        '#ajax' => array(
            // #ajax has two required keys: callback and wrapper.
            // 'callback' is a function that will be called when this element changes.
            'callback' => 'form_example_simplest_callback',
            'wrapper' => 'listDiv',
            'effect' => 'fade',
        ),
    );

    $form['price_form']['textfields'] = array(
        '#prefix' => '<div id="listDiv">',
        '#suffix' => '</div>',
        '#markup' => '',
    );

    $form['price_form']['price'] = array(
        '#type' => 'textfield',
        '#title' => 'Item Price?',
        '#size' => 10,
        '#maxlength' => 10,
        '#required' => TRUE,
    );

    $form['price_form']['submit_button'] = array(
        '#type' => 'submit',
        '#value' => t('Click Here!'),
    );
    if (!empty($form_state['values']['item'])) {
        $result = db_query("SELECT * FROM {item} where item_name='" . $form_state['values']['item'] . "'");
        if ($result->rowCount() != 0) {
            $form['price_form']['textfields'] = array(
                '#markup' => 'Already exist',
            );
        } else {
            $form['price_form']['textfields'] = array(
                '#markup' => 'New Item',
            );
        }
    }

    return $form;
}

function form_example_simplest_callback($form, $form_state)
{
    return $form['price_form']['textfields'];
}