I think the issue is not the lookup, but the excel data source which probably have to read differently in the lookup.

I am not getting any error message. I am getting warning message and also the column where Excel data needs to shown is showing #Error.

The warning message is

Warning 1 [rsRuntimeErrorInExpression] The Value expression for the textrun ‘Textbox6.Paragraphs[0].TextRuns[0]’ contains an error:

Exception of type 'Microsoft.ReportingServices.ReportProcessing.ReportProcessingException_ComparisonError' was thrown.

H:\SomePath\Report1.rdl 0 0