- Assertion (A) is correct: Conductivity of an electrolyte decreases upon dilution. This happens because the total number of ions in the solution decreases as the electrolyte dissociates to form more ions, but the ions are spaced further apart, reducing the conductivity.
- Reason (R) is incorrect: On dilution, while the number of ions increases, their individual mobility decreases due to increased distance between ions. The overall conductivity decreases, contradicting the reason provided in the statement.
Thus, the correct answer is \( \boxed{\text{(A) is correct but (R) is incorrect}} \).