When agarbatti burns, it produces pleasant smell, which is detected by the olfactory receptor present inside the nose. The action of smell generates the electrical impulse. These impulses are carried to the sensory area of brain(forebrain-cerebrum). Thus we detect the smell of agarbatti.
All information from our environment is detected by the specialised tips of some nerve cells. These receptors are usually located in our sense organs, such as the inner ear, the nose, the tongue, and so on. So gustatory receptors will detect taste while olfactory receptors will detect smell.