LM35 temperature decreases when heated
You are reading A5 but in your diagram you show it hooked up to A0:

Change your code to this and I believe it will work:
const int sensor= A0; // Assigning analog pin A0 to variable 'sensor'

void setup() {
  pinMode(sensor,INPUT); // Configuring sensor pin as input
  Serial.begin(9600);
}

void loop() {

  float reading=analogRead(sensor); //Reading the value from sensor
  float vout= (reading*5000)/1024;
  float temp= vout/10;
  
  Serial.print(&quot;in DegreeC= &quot;);
  Serial.print(temp);
  Serial.println(&quot;&quot;);
  
  delay(500); //Delay of 1 second for ease of viewing 
  
}

The data you are reading from A5 is indeterminate and just happens to decrease as A0 increases.
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UPDATE:
Ok, so you corrected yourself and are reading the correct pin in spite of what your schematic shows.  Please explain this:
float vout= (reading*5000)/1024;
float temp= vout/10;

I think you want:
float vout = (reading/1024.0) * 5000.0;
float temp = vout/10.0;

You are carelessly mixing floating point and integer math.