The best solvent for LiAlH4 is diethyl ether (6 mol/l). In THF only 3 mol/l are soluble. Therefore diethyl ether could be a better solvent. But I'm astonished why this reaction doesn't work. Perhaps you have and old charge of LiAlH4 in which the surface is already degraded to oxides. In this case the material is passivated at the surface and cannot be solved by organic solvents. You should try fresh LiAlH4. This is more important than the choice of the solvent. Also wet THF could be a reason why your reaction doesn't work. You should try dry solvents. Ethers like diglyme or triglyme are easier to dry and they are alternatives to THF or diethylether in this reaction. But don't try dioxane. It is a poor solvent for LiAlH4.

I use LiAlH4 in combination with Me3SiCl. It allows to reduse amides to amines immediately.

Use dried THF in argon atmosphere. Dissolve your compound  in dried THF  and put in pressure balanced dropping funnel  then fit it reaction schlenk including LiAlH4 in dried THF. Add drop by drop of your compound into to reducing agent.Then queched with alcohol and extract your compound ethyl acetate or any appropriate solvent.

Dissolve ur compound in THF (dry). Cool to -70 oC and slowly add LAH...It will proceed without any side reaction....quench it with alcohol.

 Dear all thank you very much for all your valuable suggestions. Perhaps new and fresh LiAH4 and dry solvent is the best condition.

You have drawn correct conclusion, Sehzadi.

Request you to take care of the following two points.