NOVELTY - Preparing ezetimibe (I) comprises: condensing phenyl-oxazolidinyl-pentanoate compound (II) with Schiff's base (III) to give phenylamino-methyl-oxo-oxo-phenyl-oxazolidinyl-pentanoate compound (IV) and cyclizing it to give phenyl-oxo-azetidinyl-propionate compound (V); hydrolyzing (V) to give phenyl-oxo-azetidinyl-propionic acid compound (VI) and reducing it to form salt of (VI); reacting (VI) with e.g. activating agent to give phenyl-oxo-azetidinyl-propane compound (VII) and reacting it with e.g. Grignard reagent to give phenyl-oxo-propyl-azetidinone compound (VIII); and converting it to (I).    USE - The process is useful for preparing ezetimibe (I).    ADVANTAGE - The process provides (I) with high yield and high purity. The intermediates used to prepare (I) are cost effective, eco-friendly, commercially viable, are reproducible on industrial scale and meets the needs of regulatory agencies.    DETAILED DESCRIPTION - Preparation of ezetimibe of formula (I) comprises: (a) condensing 5-oxo-5-((S)-2-oxo-4-phenyl-oxazolidin-3-yl)-pentanoate compounds of formula (II) with a Schiff's base of formula (III) in presence of a Lewis acid catalyst and a base in an organic solvent to give (R)-4-((S)-(4-substituted allyloxy-phenyl)-(4-fluoro-phenylamino)-methyl)-5-oxo-5-((S)-2-oxo-4-phenyl-oxazolidin-3-yl)-pentanoate compounds of formula (IV); (b) cyclizing (IV) in presence of a silylating agent, a fluoride source and in a solvent to give 3-((2S,3R)-2-(4-substituted allyloxy-phenyl)-1-(4-fluoro-phenyl)-4-oxo-azetidin-3-yl)-propionate compounds of formula (V); (c) hydrolyzing (V) in presence of a base and a solvent to give 3-((2S,3R)-2-(4-substituted allyloxy-phenyl)-1-(4-fluoro-phenyl)-4-oxo-azetidin-3-yl)-propionic acid compounds of formula (VI); (d) reducing (VI) with a base to form a salt of formula (VI); (e) reacting (VI) or their salts with an activating agent and a solvent to give substituted 3-((2S,3R)-2-(4-allyloxy-phenyl)-1-(4-fluoro-phenyl)-4-oxo-azetidin-3-yl)-propane compounds of formula (VII); (f) reacting (VII) with a Grignard reagent or organometallic reagent in presence of a catalyst or ligand in a solvent to give substituted (3R,4S)-4-(4-allyl-phenyl)-1-(4-fluoro-phenyl)-3-(3-(4-fluoro-phenyl)-3-oxo-propyl)-azetidin-2-one compounds of formula (VIII); and (g) converting (VIII) to give (I).    R1 = aryl or aryl alkyl (both optionally substituted) or 1-10C alkyl;    R2, R3, R4 = aryl (optionally substituted), H, 1-6C alkyl or 1-6C alkoxy;    X = halo or leaving group; and    Z = OR1, OH, X or 4-fluorophenyl.    INDEPENDENT CLAIMS are included for:    (1) (R)-4-((S)-(4- allyloxy-phenyl)-(4-fluoro-phenylamino)-methyl)-5-oxo-5-((S)-2-oxo-4-phenyl-oxazolidin-3-yl)-pentanoate compound of formula (IV), and their salts, solvates, isomers, hydrates and their chiral isomers;    (2) 3-((2S,3R)-2-(4-allyloxy-phenyl)-1-(4-fluoro-phenyl)-4-oxo-azetidin-3-yl)-propane compound of formula (XI) and their salts, solvates, isomers, hydrates and their chiral isomers; and    (3) ((2S,3S,4S)-1-(4-fluoro-phenyl)-2-hydroxy-4-(4-hydroxy-phenyl)-azetidin-3-yl)-acetic acid 4-((2S,3R,4S)-1-(4-fluoro-phenyl)-3-(3-(4-fluoro-phenyl)-3-oxo-propyl)-4-hydroxy-azetidin-2-yl)-phenyl ester of formula (XII), and their salts, solvates, isomers, hydrates and their chiral isomers.