How to discipline?

Dillion has learnt to clap. But he also uses that same pair of hands to beat his Mummy and Daddy for the fun of it.
How sad rite... Being abused by your beloved child.

We played along with him till we realised we have to be firm otherwise we may be misleading into thinking that its ok to slap someone.

I scolded him and even slap his hands in return but to no avail.. he will continue to beat us just to see our reaction. There was once he even grab my finger (when i was scolding him ) and give me this angelic smile that I made me smile instead of showing an angry face.

Sigh..i seriously don't know how should i discipline my son?? Hard or soft method??