unable open .xls file in webapp - Office applications - Office 365

Hello Swarupa,

Opening .xls file for Office Web Apps is not supported in SharePoint Online. You may need to convert .xls to .xlsx and open it again.
For more information about Office Web Apps, please refer to the link and download the document named Microsoft Office Web Apps Service Description:
http://www.microsoft.com/download/en/details.aspx?id=13602

Thanks,
Grace Shi