gistfile1.xml

<telerik:RadSplitContainer
    xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"
    xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"
    xmlns:d="http://schemas.microsoft.com/expression/blend/2008"
    xmlns:mc="http://schemas.openxmlformats.org/markup-compatibility/2006"
    xmlns:telerik="http://schemas.telerik.com/2008/xaml/presentation"
    xmlns:toolkit="http://schemas.microsoft.com/winfx/2006/xaml/presentation/toolkit" 
    x:Class="ClientUI.Module.Section.SectionHeader.View.SectionHeadTools"
    mc:Ignorable="d"
    d:DesignHeight="300" d:DesignWidth="400"
                           Orientation="Vertical"
					HorizontalAlignment="Stretch" 
					VerticalAlignment="Stretch"
                    telerik:ProportionalStackPanel.RelativeSize="0,20"   
        Margin="0" Padding="0">

    <telerik:RadPaneGroup 
		HorizontalAlignment="Stretch" 
		VerticalAlignment="Stretch"   Margin="0" Padding="0">
        <telerik:RadPane IsPinned="True" 
			CanUserClose="False"
			HorizontalAlignment="Stretch"
			VerticalAlignment="Stretch"    Margin="0" Padding="0"
                         PaneHeaderVisibility="Collapsed">
            <telerik:RadWrapPanel Orientation="Horizontal" HorizontalAlignment="Stretch" VerticalAlignment="Stretch">
                <!-- Groups Combo Box Start-->
                    <StackPanel>
                    <StackPanel Margin="5,0">
                            <TextBlock Text="Choose Group :"/>
                        </StackPanel>
                        <telerik:RadComboBox HorizontalAlignment="Left" 
							VerticalAlignment="Top" 
							Width="250" 
							Margin="5"
							ItemsSource="{Binding ItemGroupsSource, Mode=TwoWay}"
							SelectedItem="{Binding SelectedGroup, Mode=TwoWay}"
							DisplayMemberPath="Name"/>
                    </StackPanel>

                    <!-- Groups Combo Box End-->
                    <!-- Itemmaster Combo Box Start-->
                <StackPanel>
                    <StackPanel Margin="5,0">
                        <TextBlock Text="Choose Items :"/>
                    </StackPanel>
                    <telerik:RadComboBox HorizontalAlignment="Left" VerticalAlignment="Top" 
						Width="250"  Margin="5"
						ItemsSource="{Binding ItemmasterSource, Mode=TwoWay}"
						SelectedItem="{Binding SelectedItemmaster, Mode=TwoWay}"
						DisplayMemberPath="Itemname">
                    </telerik:RadComboBox>
                </StackPanel>
                <!-- Itemmaster Combo Box End-->
                    <!-- Action Combo Box Start-->
                <StackPanel>
                    <StackPanel Margin="5,0">
                        <TextBlock Text="Choose Actions :"/>
                    </StackPanel>
                    <telerik:RadComboBox HorizontalAlignment="Left" VerticalAlignment="Top" 
						Width="250" Margin="5">
                        <telerik:RadComboBoxItem Content="Item 1"/>
                        <telerik:RadComboBoxItem Content="Item 2"/>
                        <telerik:RadComboBoxItem Content="Item 3"/>
                    </telerik:RadComboBox>
                </StackPanel>
                <!-- Action Combo Box End-->
            </telerik:RadWrapPanel>
        </telerik:RadPane>
    </telerik:RadPaneGroup>

</telerik:RadSplitContainer>

gistfile2.xml

using ClientUI.Infrastructure.ViewModel;
using ClientUI.Module.Section.SectionHeader.ViewModel;
using Microsoft.Practices.ServiceLocation;
using System;
using System.Collections.Generic;
using System.ComponentModel;
using System.Linq;
using System.Net;
using System.Windows;
using System.Windows.Controls;
using System.Windows.Documents;
using System.Windows.Input;
using System.Windows.Media;
using System.Windows.Media.Animation;
using System.Windows.Shapes;
using Telerik.Windows.Controls;

namespace ClientUI.Module.Section.SectionHeader.View
{
    public partial class SectionHeadTools : RadSplitContainer, ISectionHeadToolsView
    {
        public SectionHeadTools()
        {
            InitializeComponent();
            if (DesignerProperties.IsInDesignTool == false)
            {
                DataContext = ServiceLocator.Current.GetInstance<ISectionHeadToolsViewModel>();
            }
        }

        public IViewFirstModel ViewFirstModel
        {
            get
            {
                return (ISectionHeadToolsViewModel)DataContext;
            }
            set
            {
                DataContext=value;
            }
        }
    }
}

ItemHeadDaoService

using ClientUI.Web.RiaDomainServices;
using HpmModel;
using OpenRiaServices.DomainServices.Client;
using System;
using System.Collections.ObjectModel;
using System.Net;
using System.Threading.Tasks;
using System.Windows;
using System.Windows.Controls;
using System.Linq;
using Telerik.Windows.Controls;

namespace ClientUI.Module.Section.Services
{
    public class ItemHeadDaoService : ViewModelBase
    {
        private HpmsDomainsRiaDomainContext context;
        public ItemHeadDaoService()
        {
            context = new HpmsDomainsRiaDomainContext();
        }

        public void LoadGroups(ObservableCollection<Group> ItemsGroupSource, User user, bool isBusy)
        {
            isBusy = true;
            ObservableCollection<Group> Items=null;
            EntityQuery<Group> query = null;
            EntityQuery<Usergroup> userGroupQuery = null;
            query = this.context.GetGroupsQuery().Where(x => x.Status == "A");
            if (user != null)
            {
                if (user.Role == "A")
                {
                   userGroupQuery = this.context.GetUsergroupsQuery();
                }
                else
                {
                    userGroupQuery = this.context.GetUsergroupsQuery().Where(x => x.Userid == user.Userid);
                }
            }
            
            this.context.Load<Group>(
                query,
                LoadBehavior.MergeIntoCurrent,
                (lo) => {
                    if (lo.Entities != null)
                    {
                        this.context.Load<Usergroup>(
                            userGroupQuery,
                            LoadBehavior.MergeIntoCurrent,
                            (lp) =>
                            {
                                if (lp.Entities != null)
                                {
                                    
                                    Items = new ObservableCollection<Group>(lo.Entities);                                   
                                    ItemsGroupSource = Items;
                                    OnPropertyChanged("ItemGroupsSource");
                                    isBusy = false;
                                }
                            },
                            null
                            );
                    }
                }, null);
        }
        public void LoadDefaultItemmaster(ObservableCollection<Itemmaster> ItemmasterSource, bool isBusy)
        {
            isBusy = true;
            this.context.Load<Itemmaster>(
                this.context.GetItemmastersQuery().Where(x => x.Status == "A"),
                LoadBehavior.MergeIntoCurrent,
                (lo) => {
                    if (lo.Entities != null)
                    {
                        ItemmasterSource = new ObservableCollection<Itemmaster>(lo.Entities);
                        isBusy = false;
                        OnPropertyChanged("ItemmasterSource");
                    }
                }, null);
        }

        public void LoadGroupSelectionChange(Group selectedGroup, ObservableCollection<Itemmaster> ItemmasterSource, bool isBusy)
        {
            isBusy = true;
            if (selectedGroup != null)
            {
                EntityQuery<Itemmaster> query=this.context.GetItemmastersQuery().Where(x => x.Status == "A" && x.Groupid== selectedGroup.Id);
                this.context.Load<Itemmaster>(
                query,
                LoadBehavior.MergeIntoCurrent,
                (lo) =>
                {
                    if (lo.Entities != null)
                    {
                        ItemmasterSource = new ObservableCollection<Itemmaster>(lo.Entities);                        
                        isBusy = false;
                        OnPropertyChanged("ItemmasterSource");
                    }
                }, null);
            }
            else
            {
                isBusy = false;
            }
        }


    }
}

SectionHeadToolsViewModel

using ClientUI.Module.Section.Services;
using ClientUI.Web.RiaDomainServices;
using HpmModel;
using Microsoft.Practices.Prism.Events;
using System;
using System.Collections.ObjectModel;
using System.Net;
using System.Windows;
using System.Windows.Controls;
using System.Windows.Documents;
namespace ClientUI.Module.Section.SectionHeader.ViewModel
{
    public class SectionHeadToolsViewModel : ViewModelBase, ISectionHeadToolsViewModel
    {
        readonly IEventAggregator aggregator;
        private HpmsDomainsRiaDomainContext context;
        private ItemHeadDaoService service;
        public SectionHeadToolsViewModel(IEventAggregator _aggregator, ItemHeadDaoService _service)
        {
            aggregator = _aggregator;
            service = _service;
            HeadDaoService = new ItemHeadDaoService();
            context = new HpmsDomainsRiaDomainContext();
            IsBusy = false;
            //Deployment.Current.Dispatcher.BeginInvoke(() =>
            //{
            //    service.LoadGroups(ItemGroupsSource, new User() { Userid = "hpmsadmin" }, IsBusy);
            //    service.LoadDefaultItemmaster(ItemmasterSource, IsBusy);
            //});
            HeadDaoService = new ItemHeadDaoService();
            HeadDaoService.LoadGroups(ItemGroupsSource, new User() { Userid = "hpmsadmin" }, IsBusy);
            HeadDaoService.LoadDefaultItemmaster(ItemmasterSource, IsBusy);
            
        }

        #region Head Properties

        private bool _isBusy;
        public bool IsBusy
        {
            get
            {
                return _isBusy;
            }
            set
            {
                _isBusy = value;
                this.OnPropertyChanged(() => IsBusy);
            }
        }
        /// <summary>
        /// Holder for Group Combo Box
        /// </summary>
        private ObservableCollection<Group> _itemGroupsSource;
        public ObservableCollection<Group> ItemGroupsSource
        {
            get
            {

                return _itemGroupsSource;
            }
            set
            {
                _itemGroupsSource = value;
                OnPropertyChanged(()=>ItemGroupsSource);
               
            }
        }
        /// <summary>
        /// Holder for Group Combo Box Selected Item
        /// </summary>
        //SelectedGroup

        private Group _SelectedGroup;
        public Group SelectedGroup
        {
            get
            {
                return _SelectedGroup;
            }
            set
            {
                if (_SelectedGroup != value)
                {
                    _SelectedGroup = value;
                    service.LoadGroupSelectionChange(_SelectedGroup, ItemmasterSource, IsBusy);
                }
                
                this.OnPropertyChanged(() => SelectedGroup);
            }
        }

        /// <summary>
        /// Holder for Item master Combo Box
        /// </summary>
        private ObservableCollection<Itemmaster> _ItemmasterSource;
        public ObservableCollection<Itemmaster> ItemmasterSource
        {
            get
            {

                return _ItemmasterSource;
            }
            set
            {
                _ItemmasterSource = value;
                OnPropertyChanged(() => ItemmasterSource);

            }
        }
        /// <summary>
        /// Holder for Itemmaster Combo Box Selected Item
        /// </summary>
        //SelectedItemmaster

        private Itemmaster _SelectedItemmaster;
        public Itemmaster SelectedItemmaster
        {
            get
            {
                return _SelectedItemmaster;
            }
            set
            {
                _SelectedItemmaster = value;
                this.OnPropertyChanged(() => SelectedItemmaster);
            }
        }

        private ItemHeadDaoService _HeadDaoService;
        public ItemHeadDaoService HeadDaoService
        {
            get
            {
                return _HeadDaoService;
            }
            set
            {
                _HeadDaoService = value;
                this.OnPropertyChanged(() => HeadDaoService);
            }
        }
        #endregion
    }
}

Why ItemHeadDaoService is not able to change the property of SectionHeadToolsViewModel .

My RadComboBoxes are not loading by this code.

There's a lot to go through here. Let me have a look.