Deepak:

You may want to look at some code I wrote and published here about a year ago. It performed an almost identical function that you are doing except that it included debouncing and was setup to handle eight separate inputs and eight corresponding outputs. My scheme shows how to do this sort of thing while leaving it possible for the processor to also do many other things too.

See it here:
http://www.8052.com/forum/read.phtml?id=47505

Michael Karas