Gemara

37b - Rabah: One may not smell Hadasim for the Mitzvah. One may smell an Esrog for the Mitzvah.

Question: What is the reason?

Answer: (Except for the Mitzvah,) Hadasim are only for their smell. Therefore, when one set it aside for the Mitzvah, he banished smelling it. Esrogim are for eating. When he set it aside for the Mitzvah, he banished (only) eating it.

Berachos 43b - Mar Zutra: One who smells an Esrog or quince blesses, "she'Nosan Rei'ach Tov ba'Peros."

53a - Mishnah: We do not bless (in Havdalah) on spices of a corpse.

This is because the spices are to offset the stench (not to be smelled for pleasure).

Rav Huna: One does not bless on bathroom spices (used to offset the odor) or oil used to remove filth from hands.

Inference: Whenever something is not intended to be smelled, we do not bless on it.

Question (Beraisa): If one enters a spice store and smells fragrances, even if he was there the entire day, he blesses only once. If he left and returned repeatedly, he blesses every time.

The spices are not meant to be smelled (but only to be sold), yet one blesses on them!

Answer: Indeed, the owner wants people to smell them, to encourage them to buy them.

Rishonim

The Rif and Rosh (3:25) bring the Gemara essentially verbatim.

Ran (DH Hadas): Some forbid even smelling Hadasim used to build the Sukah, for they are set aside. Others say that only Hadasim with the Lulav are forbidden, for they are essential for the Mitzvah. Hadasim in the Sukah are like mere wood. One may not burn them, for this detracts from the Mitzvah, but one may smell them.

Hagahos Ashri: Avi ha'Ezri says that we bless 'she'Nosan Rei'ach Tov ba'Peros' on an Esrog. R. Simchah says that we do not bless, for this is not its usage.

Rambam (Hilchos Lulav 7:26): One may not smell a Hadas in the Lulav (bundle). Since it is fit only to smell and it was set aside for the Mitzvah, it is forbidden to smell it.

One may smell an Esrog for the Mitzvah, for it was designated for the Mitzvah and banished from being eaten.

Poskim

Shulchan Aruch (OC 653:1): It is forbidden to smell Hadasim for the Mitzvah.

Beis Yosef (DH Esrog): Rashi says that we learn from Atzei Sukah, which are Asur b'Hana'ah all seven days because they were set aside for the Mitzvah (9a).

Beis Yosef (DH Kasuv bi'Seshuvas): The Rashba says that if one stipulated, one may smell it, just like stipulating permits to eat an Esrog after doing the Mitzvah. Stipulating does not help for Atzei Sukah, for "Chag ha'Sukos Shiv'as Yomim la'Shem" forbids them all seven days.

Question (Pri Megadim YD 108 Sifsei Da'as 27): This contradicts what the Beis Yosef brought from Rashi!

Question (Kapos Temarim DH Omar): How can Rashi learn from Atzei Sukah? Their Mitzvah applies day and night! Also, the Gemara forbids smelling them due to Muktzeh, which is only mid'Rabanan! The Rashba supports this. In another Teshuvah, the Rashba says that a stipulation helps for Atzei Sukah! Perhaps here he says means that even according to the opinion that stipulating does not help for Atzei Sukah, it helps for Hadasim, for their Isur is only mid'Rabanan.

Shulchan Aruch (ibid.): Letter of the law one may smell an Esrog for the Mitzvah. However, since there are different opinions about whether or not to bless on it, one should refrain from smelling it.

Shulchan Aruch (216:2): One who smells an edible fruit blesses "she'Nosan Rei'ach Tov ba'Peros." This is only if he took it to smell it or to eat it and smell it. If he took it to eat without intent to smell it, even though it gives a nice scent he does not bless.

Shulchan Aruch (14): One who smells an Esrog for the Mitzvah blesses. Some say that he does not bless. Therefore, it is proper not to smell it.

Gra (DH v'Yesh): The latter opinion holds that since it is now for the Mitzvah and not for smelling, one does not bless. The first opinion holds that since it is permitted to smell it, one blesses. The latter opinion is primary; see the Magen Avraham (217:1, brought below).

Beis Yosef (653 DH u'Mah she'Chosav Rabeinu): The SMaK writes like Avi ha'Ezri (who requires blessing), but says that one should not smell it while doing the Mitzvah because usually a person forgets to bless, and it is forbidden to benefit from the world without a Berachah. Some have the custom to smell when they bless Al Netilas Lulav. This is lunacy.

Beis Yosef (DH Kasuv b'Hagahos): Hagahos Ashri says that if one prepared a Lulav (bundle) but did not yet take it for the Mitzvah, one may benefit from it, for Hazmanah (preparation) is insignificant.

Magen Avraham (Reish 651, citing Maharshal): One may not smell Hadasim even on Shabbos, for they are Muktzeh all seven days. One may smell the Esrog on Shabbos, for then it is not meant for the Mitzvah (so all agree that one blesses on it). It seems that the argument is only about smelling it at the time one takes it for the Mitzvah. If one takes it during the day surely he blesses on it. This is like a fruit meant to be eaten; if one takes it to smell he blesses on it.

Taz (216:14): The rest of the year an Esrog is for eating and smelling. Since during Sukos it is set aside from eating, also the importance of its scent is Batel.

Kaf ha'Chayim (216:81): The Eliyahu Rabah says not to bless even not at the time of the Mitzvah. However, all agree that after being Yotzei on Hoshanah Rabah one may bless on it, for it is no longer set aside for the Mitzvah. The Eshel Avraham says that the Taz forbids blessing even on Shemini Atzeres, for one may not eat it.

Mishnah Berurah (216:51): We do not discuss one who took it for the Mitzvah and happened to smell it. All exempt in this case, like Sa'if (2) above. Rather, he intended to be Yotzei and to smell. In an analogous case of eating, one blesses.

Mishnah Berurah (52): If one smelled it, he should not bless.

Kaf ha'Chayim (653:4): Since the only reason not to smell it is the Safek Berachah, one may bless on another fruit with intent to smell the Esrog also.

Shulchan Aruch (217:1): One who enters a fragrance store blesses Borei Minei Besamim.

Magen Avraham (1): This is because the owner wants people to smell them and buy them. But one does not bless on fragrances in a room that is not a store. Even if he intends to smell them, for they were not put there to be smelled.

Gemara

37b - Rabah: (On any Shabbos) one may smell attached Hadasim, but not an attached Esrog.

Question: What is the reason?

Answer: Hadasim are only for their smell, therefore we are not concerned lest he detach it. Esrogim are for eating, therefore if he may smell it we are concerned lest he detach it.

Eruvin 40a: On Yom Tov Sheni, Nochrim detached Hadasim for people that make crowns for Chasanim. Ravina permitted people to smell them immediately.

Rava bar Tachlifa: You should forbid, for people here are not Benei Torah (they might come to disgrace Yom Tov Sheni)!

Objection (Rav Shemayah): This implies that Benei Torah would be permitted. They should have to wait after dark the time needed (to cut them)!

Rava: They must wait the time needed (to cut them. This is a decree, lest Yisraelim ask Nochrim to do Melachah on Shabbos or Yom Tov.)

Rishonim

The Rif and Rosh (3:25) bring our Gemara essentially verbatim. The Rif (Beitzah 14a) brings the episode in Eruvin.

Question (Ran DH v'Omar): Rava forbade people to smell Hadasim that Nochrim detached on Yom Tov until the time needed to cut them after Yom Tov (Eruvin 40a). R. Tam says that this applies only when there was no way to benefit without doing an Isur. Here, they could have smelled them when they were attached!

Answer #1 (Ba'al ha'Ma'or): Rather, they wanted to build a Chupah with Hadasim for the Chasan and Kalah to smell. Ravina permitted to smell, i.e. and even to build the Chupah. This could not be done with attached Hadasim, so Rava forbade until Motza'ei Yom Tov.

Rebuttal and Answer #2 (Hasagos ha'Ra'avad): Surely, Ravina would not have permitted to build a Chupah on Yom Tov! Rather, the Hadasim were brought from outside the Techum. Ravina thought that it suffices to forbid building, so he permitted to smell them. Rava saw a need to forbid even smelling, lest they make a Shali'ach to bring from outside the Techum on Shabbos.

Answer #3 (Ran, ibid.): They were brought from outside the Techum. Ravina permitted smelling them immediately, i.e. after Yom Tov. Techumim is a light Isur; what it is forbidden to some is permitted to others. Therefore, we need not wait after Yom Tov the time to bring them. Rava held that since a Melachah was done (they were detached), and a Yisrael could not have (left the Techum and) benefited by himself on Yom Tov, we decree to wait on Motza'ei Yom Tov the time needed to cut and bring them.

Answer #4 (Ran Beitzah 14a DH Hinahu): Rashi's text says that it was the second day of Yom Tov, therefore Ravina was lenient. Rava was stringent, because Melachah was needed to enable the Yisraelim to benefit from it here.

Answer #5 (text of R. Chananel, and Ge'onim cited in Ran, ibid.): It is forbidden to smell attached Hadasim, lest he detach it. One may smell an attached Esrog. Since he intends to eat it, and he may not do so today, he will not detach it (R. Chananel). Alternatively, since we permit only to smell it, this is a reminder not to detach it (Ran).

Rambam (Hilchos Shabbos 21:7): On Shabbos one may smell attached Hadasim, for they are only for smelling and its smell is available (we are not concerned lest he detach it). One may not smell an attached Esrog, apple or anything edible. This is a decree lest he detach it to eat it.

Hagahos Maimoniyos (5): If not for this decree, the fruits would not be forbidden due to Muktzeh, because people anticipate that fruits will fall off a tree.

Poskim

Shulchan Aruch (336:1): On Shabbos we do not go on trees or use anything connected to the ground. This is a decree lest one break off a branch.

Rema: This refers to trees and similar things. One may use attached reeds that are soft like vegetables. There is no decree against vegetables.

Source (Hagahos Ashri Eruvin 3:4): Rav Nachman told his Talmidim to prepare attached reeds before Shabbos to sit on on Shabbos (Eruvin 34b). The Gemara asks a contradiction regarding an Eruv on top of a reed, and concludes that it is Kosher if the reed is soft (for then one may take the Eruv Bein ha'Shemashos).

Mishnah Berurah (14): Many Poskim forbid reeds that are prone to harden even while they are soft.

Shulchan Aruch (10): On Shabbos one may smell attached Hadasim. One may not smell an attached Esrog, apple or anything edible, lest he detach it to eat it.

Beis Yosef (DH Hadas): We follow the text of the Rif, Rambam and Rosh.

Kaf ha'Chayim (61): Nevertheless, people are stringent lest one forget and detach leaves.

Mishnah Berurah (48): Whether or not he may take it in his hand depends on the argument about soft reeds in Sa'if (1).

Kaf ha'Chayim (64): One who enters a garden or orchard on Shabbos and smells roses or Esrogim must bless. We are not concerned lest he detach, since he is far away. Others say that he should not bless, because it is a scent of Isur (lest he detach them), or because no action was done for the sake of their scent. Therefore, one should not intend to smell them, and not bless.