Intervertebral disks are made up of nucleus palposus (a gel like substance) surrounded by annulosus fibrosus. Nucleus palposus mainly contains fluid like water and other things. At night, when we are sleeping, this structure absorbs some fluid which it had lost during day time activities so that the next morning we find ourselves to be slightly taller. During daytime as we carry out our regular tasks, the nucleus palposus gets compressed and some amount of the fluid passes out resulting in decrease in the height. PS: correct me if I am wrong :)
Chandan its also related to muscles like in morning while u wake up ur all muscles are relax usually and during day time u will work so it becomes tired so muscle is also affecting but scondary reason .. primary reason for tht is iv discs
Muscles after whole night sleep get relaxed and the muscles contraction minimised. So the limbs joint space and intervertebral space become more than the day time.