I want to develop an app which play background music for a call,and is audible only for the caller and listener. Is there any application which is already available,Is it possible in android?
Some mobile platforms do support this functionality at the platform-level (e.g. I've tested this with the Qualcomm APQ8064 where I had configured the hardware codec route accordingly, and it works). But Android doesn't have an API that let's you use this as an app developer, so on a non-rooted phone there's not really anything you can do.
Why there's no API for it - or whether there will be one in coming versions of Android - I don't know. There might be legal issues in some markets, or it might just be because it's considered as a semi-obscure feature that they don't see a great demand for and which is supported only by a relatively small number of platforms.
Another thing to consider is, do you really want to have music playing in the background during a call?
The audio is going to be 8 kHz mono (or 16 kHz mono if you're in a wideband call), and it's going to be AMR-encoded along with the rest of the speech signal (AMR is a low-bitrate codec designed for encoding speech). In other words, any music you play over the voice call uplink is going to sound really, really bad.
UPDATE: For APQ8064-based phones where you have root access, the procedure would be something like this (I don't remember the exact syntax off the top of my head):
audioManager.setParameters("incall_music_enabled=true");
// Execute the following using e.g. Runtime.exec()
amix 'SLIMBUS_4_RX Audio Mixer MultiMedia2' 1
aplay -Dhw:0,1 mono_8khz_data.pcm
// When you want to stop music playback, stop the aplay process, and then do
audioManager.setParameters("incall_music_enabled=false");