Simulation of sensor in proteus using Atmega16
It looks like you haven't connected AVcc to Vcc. Technically, in real life, it always needs to be connected to Vcc, but the simulation might be forgiving. In this case, you've set AVcc as the reference, so it definitely needs to be connected and the simulator is picking up on that.

On a side note, you cannot connect AVcc to a voltage that isn't Vcc, if you want to use a different voltage reference for ADC, you need to connect it to Aref.