Why is "वहाँ" missing from this sentence? "what is in your hands?" is the translation here...
No, वहाँ is specifically when referring to a position. In the case of "What is there in your hands" the word 'there' is not referring to a position. It's the same usage as "There are many cows". You wouldn't say वहाँ कई गायें हैं, which would translate as "There are many cows there". So in this sentence "is there" = "है".
PS. If there was a comma, then you would be correct. "What is there, in your hands" would make 'there' positional.