The ACL in question starts by permitting traffic from the source IP address 192.168.1.1 and then proceeds to deny traffic from the same address. In ACLs, rules are evaluated in order until a match is found. Once a packet matches a rule, no further rules are evaluated for that packet. Therefore, since the first rule permits traffic from 192.168.1.1, packets from this source address will match the permit rule and not proceed to the deny rule.