Epistasis is the interaction between different genes, where the effect of one gene is dependent on the presence of another gene. So, it is possible for epistasis to occur when two genes are located on the same chromosome. However, epistasis can also occur between genes on different chromosomes. The key characteristic of epistasis is the interaction between genes, rather than their physical location. In your case, the presence of one gene positively regulating the other gene and negatively regulating the other one, it would be a type of epistasis.

Dear Rami:

I'm agreeing with you. But could you give us some references or witnesses for such epistasis on the same chromosome?

A paper or book?

Thanks