This principle states that the upthrust of a fluid on a body is equal to the weight of fluid displaced by the body. As the beaker of liquid is gradually raised, the suspended object displaces increasing amounts of liquid and the uphrust generated causes the weight measured by the spring balance to gradually decrease. Notice that this weight decreases only while the surface of the liquid moves between the bottom and the top of the suspended object.
Note: As the suspended object displaces more liquid the surface of the liquid should rise slightly in the beaker. This effect has been neglected here.