The D.C. City Council heard sharply contrasting testimony yesterday from business leaders, labor union officials, city planners and citizens representing themselves and various neighborhood groups about the wisdom and need for a $109.6 million convention center proposed for Mount Vernon Square NW.

The city's business community is all for the center, as are the labor unions and the city planners working for Mayor Walter E. Washington. They all believe that construction of the vast exhibition hall will create jobs, spur a revitalization of the city's old downtown and add to the District's tax base.

"We see (the proposed center) as a public enterprise that will pay for itself and when fully operational, yield a significant fiscal profit for the city government and the people of this city," said Ben W. Gilbert, director of the D.C. Municipal Planning Office.

Gilbert's views were repeated by a score of business and labor union officials who testified at yesterday's Council hearing, the first since the mayor formally unveiled the convention center project last month.

For the first two hours of the hearing, the Council heard nothing but praise for the project, which an economic feasibility study commissioned by the city government says will bring as many as 400,000 additional convention delegates to Washington by 1983.

The city can expect anywhere from $12 million to $14 million a year in new tax revenues - above and beyond the center's expected yearly operating deficit - the study found.

These projections were challenged, however, by virtually all of the citizens and Advisory Neighborhood Commission members who testified after Gilbert and the business leaders, led by officials of the Metropolitan Washington Board of Trade, had their say.

"Someone, somewhere is imposing on this city a convention center that is not needed," said John D. Kelly, staff director of the Upper Northwest Coordinating Council, an umbrella organization representing 40 church groups and neighborhood associations.

Kelly and others questioned the number of jobs the center is likely to create, the number of delegates who will attend conventions at the center and the number of new hotel rooms that will be built to accommodate the projected number of delegates.

In effect, Kelly and other community representatives challenged virtually all of the economic projections in the convention center feasibility study prepared for the city by Gladstone Associates, a consulting firm with offices in several major U.S. cities.

The Gladstone study is now undergoing a review by the General Accounting Office at the request of Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate Appropriations Subcommittee on the District of Columbia.

Leahy asked for the GAO review to help him decide whether Congress should approve the District's plan, which calls for the city to borrow the $109.6 million from the U.S Treasury to build the convention center. The money would be repaid with interest over a 30-year period.

Yesterday's hearing was designed to help the Council decide whether it should approve a $27.7 million amendment to the city's 1978 capital budget. The money would be used to acquire land near Mount Vernon Square NW for the convention center and to pay other preconstruction costs.

Several Council members, including Marion Barry and Council Chairman Sterling Tucker, are publically committed to building the center - although yesterday they raised questions about whether the center should be built at Mount Vernon Square or at a less expensive site. They also asked about the implications of borrowing over $100 million from the Treasury and the effect that would have on other capital projects proposed for the city.

Only one Council member, the Rev. Douglas E. Moore, has publicly announced opposition to the center.

After the hearing, Tucker said he thought the convention center would be approved by the Council after consideration of the ultimate location, financing and size of the center. "I think we know what the issues are," Tucker said.