@Sushan - - Thanks for the question and using MS Q&A platform.
According to the offical documentation, the latest SHIR has a security fix that has been changed and does not allow access to local files by default.
You must run
.\dmgcmd.exe -DisableLocalFolderPathValidation
to disable the setting for more details, refer to Set up an existing self-hosted IR via local PowerShell
Default: Enable security validation to disable access to file system of the local machine.
After Disabling access to file system of the local machine using:
.\dmgcmd.exe -DisableLocalFolderPathValidation
able to access the data from linked service.
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