The claim was made by Anthony Scrivener who was opening the defence for former council leader Dame Shirley Porter.
It is the first time that she has given a detailed response to the allegations since they were made five years ago.
Mr Scrivener disclosed that he had obtained the opinions of three leading accountancy firms.
He said: 'In fact, there was no loss.' He added: 'The firms were surprised at how late in the inquiry the question of loss was looked at. The inquiry had been going for years before anyone sought to ask if there was a loss to inquire into.'
He added that he and his legal team had been seeking information from Westminster Council which had not been obtained by Mr Magill in his inquiry.
He said the commissioned accountants had all refused to give an opinion until they were satisfied that they had all the relevant information.
He told the inquiry: 'If there was no loss, it would not have been necessary to have had an inquiry lasting years causing incaluable loss in financial terms to the individuals concerned.'
The identities of the firms will be revealed later in his submission which is expected to last up to four days.
Mr Scrivener added that the district auditor intended to surcharge councillors who had had a scheme approved by a leading barrister before it was implemented, he said.
He also said that in his report, the district auditor had largely relied 'on the contents of political meetings as evidence for what happened in the council. That has never happened before.'
He said councillors were well aware of the difference between what was said at political meetings with colleagues and what was decided in the council chamber with the advice of officials.
The district auditor's 12,000 page report contains a long series of 'strictly confidential' political papers written by Dame Shirley and her colleagues for discussions in secret meetings.
Mr Scrivener told the inquiry that this affair was surrounded by a 'great deal of hypocrisy.'
He said: 'What has happened is that the political papers of one party have become common property,' while the opposition party's papers had remained secret.
He added that it was easy to make political capital out of these papers once they had been revealed.
He also accused Mr Magill of confusing legal principles when he accused the ten of acting unlawfully.