Nitric acid oxidises iron(II) sulphate to iron (III) sulphate with the liberation of nitric oxide gas.
6FeSO4 +3H2SO4 + 2HNO3 (dil. ) → 3Fe2 (SO4 )3 + 4H2O +2NO
The nitric oxide so formed reacts wtih more of iron(II) sulphate to form nitrosoferrous sulphate, which appears in the form of brown ring at the junction of liquids.
FeSO4 + NO → FeSO4 .NO