A Sikh couple who wanted to adopt children were "told not to bother applying" because they are of Indian origin, a court has heard.
Sandeep and Reena Mander allege that Adopt Berkshire discriminated against them by saying white British parents would be given priority.
But at a hearing, Windsor and Maidenhead Council said the Manders' claims were "not accurate".
The couple said they would have adopted a child regardless of his or her race.
The Manders, who had several rounds of failed IVF treatment before they applied to adopt, allege the council said adoptive parents of white British or European origin would be prioritised because more white children were in need.
Mr Mander, from Maidenhead, said that during a short and "negative" call with the adoption service in March 2016, he had been asked about his ethnicity.
He said he called back the following month "reaffirming a desire" to adopt children and offering to provide a home for siblings.
A social worker visited the couple, but Mr Mander alleges he and his wife - who are being backed by the Equality and Human Rights Commission - were "sidelined" because of their "cultural heritage".
Catherine Foster, representing the council, said the authority "doesn't accept" that was the case.
The couple have since adopted a child from the United States.
The case continues.