Agarbatti or incense stick on burning produces fragrance. These fragrances reach to olfactory bulb through the nose.
The olfactory bulb is a chemosensory organ. It detects the presence of chemicals present in the air and sends it to cerebrum for interpretation.
Cerebrum analyses the information and conveys us about the smell through previous experience.
Additional note: Some animals especially carnivore contain highly developed olfactory bulb. They can smell things better than us. So, CID use sniffer dogs in crime investigation. Similarly, a shark can detect the presence of blood in water through miles due to this property.
