As Ijaz suggested
"Your concept is true. Off hook signal is used for pulse dial decoding. But before applying this signal to the controller, be sure it is at TTL level and no noise/spikes. You may use a schmitt trigger gate for this purpose"

what does this means:
do i have to use some components with the Port 1 where off hook is detect in order to detect Pulse Dialing..?


Ijaz you are rite that Mark/ break ratio is important:-

Like if i take:-

Make / Break ratio as 60:40 micro-seconds

and Inter Digit Space as 800 milli seconds..

how will i detect Pulses from telephone viz SLIC.

Suppose MT8816 X0 gets connect with Y0 if digit 0 is dialed if any other digit is dialed nothing happens.

what adjustment should be made in the following:-

should i use any interuppts of timing coz if i use the following software can only enterain one telephone set dialing...

MOV R0,#0D ; "initial value in Pulse Counter Register"

AGAIN:
JB P1.0,$ ;waiting for pulses to come on the same bit where off-hook is detected
Inc R0
JNB P2.1,$ ;waiting for low
CJNE R0,#02D, AGAIN ; "detecting whether the dialed number is 2 or not, if 2 then its desired function is done other wise controller wait for pulses"
SJMP MT8816_ADDRESS