That is basically a soffit built with 2by4 framing and drywall so you don't end up with a hole/open space above your cabinets. Tear it out. Remember the corners will be taped and mudded to the ceiling and the walls so cut into the corner with a utility knife before removing it. It will be nailed solid. Tear off the drywall so you can see how to remove the studs underneath. Remove the cabinets first. Watch out for a range hood vent or any wiring up there. Be prepared to finish out the walls and ceiling up to or past the area of your new cabinets which may not be easy if you have to match wallpaper or have a popcorn ceiling. Good luck.