Around 20 Chinese soldiers last week entered Indian territory near the LAC and pitched their tents in Chepzi area in Ladakh, sources said on Sunday.
Around 20-22 Chinese People's Liberation Army (PLA) soldiers had last week pitched around 8-10 tents in the west of Chepzi in Ladakh area, the sources said.
However, the Army headquarters insisted there was no such incident in that area.
It was not immediately known whether the Chinese troops still remained in the Indian territory or have left.
The Army had held a flag meeting with the Chinese side on Saturday.
Chepzi is close to Chumar area, which has been witness to a large number of incursions by the Chinese side in the last one year.
In April, Chinese troops had entered 19km inside Indian territory in the Daulat Beg Oldi sector and left the place only after long negotiations and a series of flag meetings between the two sides.
The reports about the Chinese camp in the area have come soon after PLA troops apprehended five Indian nationals in the Chumar area and took them to their camp across the Line of Actual Control (LAC) in an apparent bid to stake their claim on the area.
After the two countries signed the Border Defence Cooperation Agreement (BDCA) in Beijing, they have agreed to resolve their issues under the mechanisms provided by the new pact aiming to prevent flare-ups between their troops.
Defence minister AK Antony had recently warned that the new border pact does not guarantee that nothing will happen in these areas in future.
Chumar has been one of the most active areas on the LAC in terms of transgressions by the Chinese troops.
Located 300km from Leh, it has always been an area of discomfort for the Chinese troops as this is the only place along the Sino-Indian border where they do not have any direct access to the LAC.