Power, Hindalco and RPower amongst firms which got blocks.
After rising to day's high of 17,801.39, the BSE benchmark index dipped to a low of 17,622.62, after the government auditor said private firms likely to have gained from coal blocks that were allocated on nomination basis, instead of competitive bidding.
However, helped by buying support in Tata Motors, Infoys, HUL and ITC, Sensex concluded 33.87 points up at 17,691.08.
Similarly, the 50-share NSE index Nifty closed 3.35 points higher at 5,366.30.
Around 25 companies declined after the CAG said it has found irregularities in the government coal allocation and usage. Reliance Power dropped 5.6 per cent, Tata Power declined by 3.71 per cent, Jindal Steel Power lost 4.02 per cent and Hindalco dropped 2.5 per cent.
"Markets ended flat, reversing the earlier gains of the day. The CAG report had an impact on sentiments," said Dipen Shah, Head of Fundamental Research, Kotak Securities.
Tata Motors led the 16 gainers in Sensex today after reports said the company's global sales rose. Maruti settled with marginal gains after it announced yesterday that production will resume at Manesar plant from August 21.
Across sectors, FMCG, IT and Auto gained while selling was prominent in realty, metal, power, capital goods and PSUs.
Brokers said major market players were seen reducing their positions ahead of a long week-end following holiday on Monday on account of 'Ramzan Id'.
A firming trend in the Asian region and higher opening in Europe after positive comments from German Chancellor to ease Eurozone debt worries, also helped the domestic market to end in positive zone, they added.