@Sheik Peersha
Is it possible that the VHD is encrypted? If so you might try using this template which creates an encrypted managed disk from an encrypted VHD. Also make sure that the VHD was prepared, see here for documentation on this. You can also directly upload a VHD to a managed disk, maybe see if this process works for you.
Hope this helps. Let us know if you are still having issues or have further questions.
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