Step 1: Total soil water potential is built up of a few separate parts: the gravitational potential, the matric potential, the osmotic (solute) potential and sometimes a pressure potential. Each part depends on a different physical cause, so check the two statements against what each part is actually caused by.
Step 2: The gravitational potential of soil water is set purely by the height of the water relative to a chosen reference level. Lift the water higher and this potential rises, lower it and the potential falls. It has no connection to the chemical makeup of the soil solution or to the gas pressure above it. Statement (I) says the opposite of this, that it is independent of elevation and depends instead on chemical and pressure conditions, so Statement (I) is wrong.
Step 3: Osmotic potential is caused by dissolved salts. By definition it is the work needed to move a unit quantity of water from the actual soil solution into an otherwise identical system with no solutes present, keeping the elevation and gas pressure the same. That is exactly what Statement (II) describes, so Statement (II) is correct.
Step 4: With Statement (I) false and Statement (II) true, the matching option is the one that says Statement (I) is incorrect but Statement (II) is correct.