The item you are trying to delete is mentioned in a document named MCH of the type Lab Test Template.
So remove that Item from MCH and you should be able to delete it.
However, one more thing. If this is some kind of stock item, then you will have cancel all stock and purchase transactions and then again try delete.
I think this is a more apt post for discuss.erpnext.com as it is more related ERPNext than to Frappe