indriyāṇi mano buddhir asyādhiṣhṭhānam uchyate
etair vimohayatyeṣha jñānam āvṛitya dehinam
The senses, the mind and the Reason are said to be its seat; by these enveloping wisdom, it bewilders the dweller in the body.
In plain words: Krishna says desire lives in the senses, the mind and the thinking intellect. Through them it hides wisdom and confuses the soul living in the body.