'Refraction of light' is responsible for this property. When light coming from denser medium enters rarer medium, it is bent away from the normal.

Let any object B is at the bottom of a pond. Consider a light ray BC from the object that moves from water to air. After refraction from the water surface, the ray moves away from the normal N along the path CD. The produce of CD appears from the point B' and a virtual image of the object at B appears at B'.
Refractive index of water = Real depth/Apparent depth