Ok, was having this issue as well and this is what fixed it for me. For the record I'm using Windows 8.1 and Java JDK 1.8.31, all 64-bit.
The problem is with the space between "Program" and "Files" in the path set in JAVA_HOME. I've had this problem before but didn't really realize until I was checking the instructions here for setting JAVA HOME, then it all made sense.
In a nutshell, change the JAVA_HOME path from:
C:\Program Files\Java\jdk1.8.0_31
to
C:\Progra~1\Java\jdk1.8.0_31
Make sure to set the correct JDK version number for your installation. Removing the space from the path fixed everything on my system.
As noted on the page linked above,
use C:\Progra~1\ for C:\Program Files\
and C:\Progra~2\ for C:\Program Files(x86)\
depending on where you have the JDK installed on your system.
Note: Just to be clear, before making this change my system correctly echoed the value of JAVA_HOME to be C:\Program Files\Java\jdk1.8.0_31 in the command window, leading me to believe all was well. However, attempting to run %JAVA_HOME%\bin\javac reported that the path could not be found. After removing the space from the JAVA_HOME path the same command runs perfectly.