cpu is 100 percent utilized by sql server can i restrict sql server to use 80% cpu

Most likely...you're going to need to tune your queries to make your CPU usage go down.

I don't know of a way to do it by percentage, but it's possible to restrict the number of processors and the number of threads, as well as the amount of memory, available to SQL Server.

can  know how to restrict no of processors

In the SQL Manager, right-click on the server in question and select Properties.  I believe the Processor and Memory settings are the first couple things in the list in the left.

Controlling CPU usage is something that really needs to be done by the OS. Applications don't normally know how much CPU time they are using and can only control this in a rather crude way. Windows 2000 Datacentre Edition could do this but I don't know if later versions maintained it.  Normally there would be no benefit in this unless there are other applications that cannot get adequate CPU time.

Hi,

Of course this is going to have a negative effect on your querries.

So why do you want to make a possibly bad situation worse?

Are there other applications on this server that are struggling?

See this series for a take on how to audit server performance from a DBA point of view
http://www.sql-server-performance.com/articles/audit/perform_performance_audit_p1.aspx

As chapmandew said, you are going to need to tune your queries.

Cheers
  David

PS This isn't like the red line on your cars rev counter. The CPU stuck at 100% isn't a bad thing like it is with the car which translates to significant wear on the engine.

The only issue with the CPU at 100% for too long is that you are likely to have queries that are taking too long to return to the user, and/or queries that are timing out.

thanks