This invention relates to an improved and scalable process for the preparation of substantially pure palonosetron and its acid addition salts, in particular hydrochloride (I) which comprises of, (a) converting intermediate (IIa) as such or as its freebase (II) to a crude mixture of diastereomeric palonosetrons (VIII) or (VIIIa) contaminated with varying amounts of unconverted intermediate (II) or (IIa) via hydrogenation under pressure with an appropriately chosen hydrogenation catalyst in an suitable organic solvent. (b) making the resulting crude mixture of diastereomeric palonosetrons (VIII) or (VIIIa) contaminated with varying amounts of unconverted intermediate (II) or (IIa) substantially free from (II) or (IIa) via halogenation reaction. (c) Finally, converting the resulting diastereomeric palonosetron (VIII) or its hydrochloride (VIIIa) substantially free from intermediate (II) or (IIa) to the desired palonosetron hydrochloride (I) in substantially pure form via selective crystallization from a suitable single or mixture of organic solvents.