Pakistani forces fired mortar shells on Indian positions in Durga near Poonch town in Jammu and Kashmir on Tuesday violating a 13-month-old ceasefire along the Line of Control.
There were no casualties, an army spokesperson said.
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Delhi on Wednesday took up the issue with Pakistani authorities, who said they would investigate the matter.
However, Pakistan has also denied that its troops shelled Indian positions.
"The Director General of Military Operations spoke to his Pakistani counterpart and informed him of India's concerns," Lt Gen B S Thakur, who took over as Vice Chief of Army Staff on Wednesday, told reporters in Delhi.
The Indian Army confirmed the shelling incident on Tuesday night.
Defence Minister Pranab Mukherjee said the government could rethink its offer of troop reduction in Kashmir if conditions deteriorated further.
India had started redeployment of troops from some crucial sectors in Jammu and Kashmir following Prime Minister Manmohan Singh's announcement to that effect when he visited Kashmir in the latter part of 2004.
According to defence experts, the Pakistani shelling could be a desparate bid to push in terrorists from across the Line of Control.
The Pakistani army has in the past resorted to heavy shelling of Indian positions while providing cover fire for insurgents.
Two days ago, Indian security forces gunned down six terrorists trying to sneak into India in the Mendar sector in the Poonch Rajouri area.
Some of the militants managed to escape.
WITH INPUTS FROM PTI