The report was equally critical of the international community's failure in their duty to stop the LTTE war crimes.
The inquiry report was presented to the top defence official Gotabhaya Rajapaksa today.
The same report was handed over to the chief of the Army, Jagath Jayssuriya in February.
The report focussed on the allegations of civilian casualties raised in a British TV channel documentary.
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Sri Lanka's own Lessons Learnt and Reconciliation Commission (LLRC) in its report had recommended that allegations of civilian casualties need to be investigated.
The Army court of inquiry was in response to the LLRC findings.
"From the testimony presented, the commission of inquiry concluded that the instances of shellings referred to in the LLRC report were not caused by the Sri Lanka Army and civilian casualties might have occurred due to unlawful acts by the LTTE," the report said.
The report has further contended that civilian casualties are inevitable due to the vagaries of the war but if the fresh evidence is presented giving precise information, Sri Lanka Army was willing to institute investigations.
The island has been the subject of two UN Human Rights Council resolutions both of which have called for credible investigations in to the violation of the international humanitarian law.
The report adds that the Army would next move to investigate the Channel 4 allegations of summary execution of LTTE cadres captured by it.