Hi Ritu.. :)
Suppose, we are plotting in (Y,r) space.
Now, intersection of IS and LM will give you "r"
As IS is a function of "r" , an increase in Expected inflation will have no impact on it.
But, LM is a function of "i" where i = r+expectd inflation.
Thus, for an increase in expected inflation, "r" must fall to keep the same level of "i"
Therefore, equilibrium level of "r" has decreased.
And LM shift down resulting in a increase in equilibrium output.
:)