Canonical launched the final release of the Ubuntu 16.04 LTS (Xenial Xerus) operating system on April 21, 2016, replacing the Ubuntu Software Center graphical package manager, which most of the Ubuntu Linux users considered useless, with the brand-new and modern GNOME Software.
To make users feel even more comfortable with their new package manager, Canonical renamed the GNOME Software app to Ubuntu Software, but it looks like someone discovered a pretty serious bug in the application, which apparently does not allow you to install software packages in the .deb file format obtained from third-party sources. We can confirm that the issue is present right now in Ubuntu 16.04 LTS with GNOME Software 3.20.1.
Source: http://news.softpedia.com/news/gnome-software-bug-doesn-t-let-ubuntu-16-04-lts-users-install-third-party-debs-503493.shtml
Submitted by: Arnfried Walbrecht
For now, you can right-click on the deb file via the file manager and from there, select to open it with the older Ubuntu Software Center to install until this gets fixed.
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