Waqar;
Michael (and others) have tried to tell you quite a few times that to make Port 2.0 an input you cannot write a zero to that port. Your third line in MAIN sets all the port pins of P2 to 0, effectively tying those pins to ground. Trying to force those pins high will very probably damage the microcontroller because of excessive current in that port. At the very least you MUST write a 01h or 00000001b to port 2 to allow P2.0 to act as an input. Until you accept this there is little anyone can do to help you any further.

Also, is dial tone going to be present on the line you are trying to sense for dial pulses? If so, that will really throw a monkey wrench into what you are trying to accomplish since your code is going to try to count the frequency of your dial tone.

Hal