Colonel Adam Griffiths said he had not seen any evidence to suggest bodies of Iraqi militants taken back to a British camp after a gun battle were mistreated.
Col Griffiths was the officer commanding B Company, 1st Battalion the Argyll and Sutherland Highlanders, in May 2004 when he was leading a "rover group", which was ambushed by Iraqi insurgents.
The ambush was the start of a three-hour pitched battle on May 14, 2004, which has since become known as the Battle of Danny Boy.
Col Griffiths was the first military witness to give evidence to the al Sweady Public Inquiry in London, which is examining claims UK troops mistreated and killed detainees after the battle.
The inquiry, which was ordered in 2009, is looking into claims 20 or more Iraqis were unlawfully killed at Camp Abu Naji (Can), near Majar-al-Kabir, on May 14 and 15, 2004, and detainees were ill-treated there and at Shaibah Logistics Base, where they were moved to.
The Ministry of Defence denies the claims, saying those who died were killed on the battlefield, and bodies handed back were those that had been removed from the battlefield and taken to Can.
Col Griffiths admitted the order to take bodies back to the base was highly unusual but must have been for a good reason. It has previously been suggested the order was given because it was thought the insurgents included someone responsible for the murder of six members of the Royal Military Police in Iraq the previous year.
But Col Griffiths said he did not, and had never, believed rumours that troops had mutilated bodies before they were handed back to relatives.
In a statement to the inquiry, he said: "I did not believe any of our soldiers had mutilated a body, and I did not see at the time, and have not seen since, any evidence to support this proposition.
"I thought then, and I still think now, that the rumours were baseless and caused by a combination of ignorance among the local population as to the traumatic injuries that can be suffered in combat and the misinformmation spread by insurgents who wished to discredit the coaltiion forces."
Col Griffiths said he had seen nothing to suggest mistreatment of detainees at Can, nor mistreatment on the battlefield. Asked if he had seen any executions, he replied: "Categorically no."
Col Griffiths said his company's main role was to train and mentor the Iraqi Civil Defence Corps, and admitted he had been given no specific training on appropriate levels of force to be used when detaining or handling prisoners.
Col Griffiths told the inquiry he thought there were around 12 bodies brought back to the base after the battle - five or six in each vehicle, laid across the back on top of each other.
"They were not covered by anything and all I remember about their appearance is that they were male and were adults and some of them looked quite young. I was standing about five metres away from the vehicles and I could see gunshot wounds to the limbs, torsos and heads of the bodies.
"I did not observe anything that appeared to be inconsistent with battlefield injuries. I can recall that some of the limbs must have been broken as they were sticking out at unnatural angles. Injuries of this type can be caused by 5.56mm and 7.62mm ammunition.
"I am aware of this as I have seen similar injuries before which I know to have been caused by ammunition of that size."
The inquiry is the second probe into the claims. A Royal Military Police inquiry was ruled inadequate by high court judges after a legal battle by several Iraqis who claim they were abused by British troops after the firefight.
The inquiry continues.