I was trying to install ubuntu server 14.04.3 as a guest on KVM as referred in this link
I made sure that the guest server doesn't have network. Following command used for installation:
sudo virt-install -r 1024 --nonetworks -n test1 --disk path=/var/lib/libvirt/images/st1.img,size=30 --location /home/user/Downloads/ubuntu-14.04.3-server-amd64.iso --extra-args "console=ttyS0,115200n8 serial"
Although the ubuntu installer didn't recognise any network interface it still asked for mirror source and I couldn't continue to install the system.
Ubuntu installation process is different when installing using direct connection (Monitor,Keyboard, Mouse)/VNC and when installing via serial port (Console). It looks like that there is a bug when installing via serial port that cause the installation to not permit to continue to rest of the installation when mirror site isn't available. The only way to install ubuntu server as a guest without internet is using VNC. Using VNC there is no need to remove network interface, it just automatically detect that the internet isn't available and skip the requirement to have mirror site available. I have tested is on ubuntu servers 14,15 and 16.