diff --git a/erpnext/stock/doctype/serial_and_batch_bundle/serial_and_batch_bundle.py b/erpnext/stock/doctype/serial_and_batch_bundle/serial_and_batch_bundle.py
index d9071c406a2..690e3c81c92 100644
--- a/erpnext/stock/doctype/serial_and_batch_bundle/serial_and_batch_bundle.py
+++ b/erpnext/stock/doctype/serial_and_batch_bundle/serial_and_batch_bundle.py
@@ -2297,7 +2297,11 @@ def get_auto_batch_nos(kwargs):
 
 	stock_ledgers_batches = get_stock_ledgers_batches(kwargs)
 	pos_invoice_batches = get_reserved_batches_for_pos(kwargs)
-	sre_reserved_batches = get_reserved_batches_for_sre(kwargs)
+
+	sre_reserved_batches = frappe._dict()
+	if not kwargs.ignore_reserved_stock:
+		sre_reserved_batches = get_reserved_batches_for_sre(kwargs)
+
 	picked_batches = frappe._dict()
 	if kwargs.get("is_pick_list"):
 		picked_batches = get_picked_batches(kwargs)
diff --git a/erpnext/stock/doctype/stock_reservation_entry/test_stock_reservation_entry.py b/erpnext/stock/doctype/stock_reservation_entry/test_stock_reservation_entry.py
index ddbf0b2dc25..942c7f482ae 100644
--- a/erpnext/stock/doctype/stock_reservation_entry/test_stock_reservation_entry.py
+++ b/erpnext/stock/doctype/stock_reservation_entry/test_stock_reservation_entry.py
@@ -678,6 +678,36 @@ class TestStockReservationEntry(FrappeTestCase):
 		# Test - 1: ValidationError should be thrown as the inwarded stock is reserved.
 		self.assertRaises(frappe.ValidationError, se.cancel)
 
+	@change_settings("Stock Settings", {"allow_negative_stock": 0, "enable_stock_reservation": 1})
+	def test_reserved_stock_validation_for_batch_item(self):
+		item_properties = {
+			"is_stock_item": 1,
+			"valuation_rate": 100,
+			"has_batch_no": 1,
+			"create_new_batch": 1,
+			"batch_number_series": "SRBV-.#####.",
+		}
+		sr_item = make_item(item_code="Test Reserve Item", properties=item_properties)
+		# inward 100 qty of stock
+		create_material_receipt(items={sr_item.name: sr_item}, warehouse=self.warehouse, qty=100)
+
+		# reserve 80 qty from sales order
+		so = make_sales_order(item_code=sr_item.name, warehouse=self.warehouse, qty=80)
+		so.create_stock_reservation_entries()
+
+		# create a material issue entry including the reserved qty 10
+		se = make_stock_entry(
+			item_code=sr_item.name,
+			qty=30,
+			from_warehouse=self.warehouse,
+			rate=100,
+			purpose="Material Issue",
+			do_not_submit=True,
+		)
+
+		# validation for reserved stock should be thrown
+		self.assertRaises(frappe.ValidationError, se.submit)
+
 	def tearDown(self) -> None:
 		cancel_all_stock_reservation_entries()
 		return super().tearDown()
diff --git a/erpnext/stock/stock_ledger.py b/erpnext/stock/stock_ledger.py
index f4956e1b600..8b61ca56983 100644
--- a/erpnext/stock/stock_ledger.py
+++ b/erpnext/stock/stock_ledger.py
@@ -2313,6 +2313,7 @@ def validate_reserved_batch_nos(kwargs):
 					"posting_date": kwargs.posting_date,
 					"posting_time": kwargs.posting_time,
 					"ignore_voucher_nos": kwargs.ignore_voucher_nos,
+					"ignore_reserved_stock": True,
 				}
 			)
 		)