Inflating the expenditure does not benefit any stakeholder -- neither the contractor nor the government,' he said.

'No company would like to increase its investment unproductively. Every additional dollar of wasteful investment dents the profit of the contractor.'

But the Anil Ambani group had said that Reliance Industries had deliberately inflated the capital expenditure, adding that the same will result in losses worth billions of dollars to the government.

The Anil Ambani group said based on the original estimate of the gas output of 40 million units a day, when the fields were handed over to Reliance Industries, the capital expenditure was pegged at Rs.12,500 crore ($2.5 billion).

How can this more than triple to $9 billion when the output has been envisaged to only double to 40 million units, questioned the Anil Ambani group, which is fighting a bitter legal battle with Reliance Industries over the Krishna-Godavari gas.

In June, the Bombay High Court asked Reliance Industries to supply 28 million units of gas from the fields to Anil Ambani-led Reliance Natural Resources for 17 years at $2.34 per unit.

But Reliance Industries challenged the verdict in the Supreme Court, which heard the case July 20 and fixed Sep 1 as the next date of hearing. The court also asked all parties to file their replies on the government position on the matter by then.

The special audit was sought by the petroleum ministry in November 2007 when M.S. Srinivasan was petroleum secretary and V.N. Kaul was the comptroller and auditor general of India.