Thanks all as you said when I switched places the led blinked. When I connect the +5v from arduino the led blinks properly there are 500ms between blinks.
Now I have another problem, when I connect a 12V, 1000ma ac/dc adapter with a 1K resistor as shown in the picture, the led is always on (no blink), even when arduino is detached from the computer. Another thing is even if I plug off the adapter the led is still on, it slowly fades away. Please bare with if this is too trivial