To solve this question, the user needs to have knowledge about the capital cities of India and their geographical features.
The correct answer is D. Itanagar.
Option A, Bangalore, is not correct as it is not built on a saddle overlooking two hills.
Option B, Dehradun, is not correct as though it is the capital of Uttarakhand, it is not built on a saddle overlooking two hills.
Option C, Mumbai, is not correct as it is not a capital city of India.
Option D, Itanagar, is correct as it is the capital of Arunachal Pradesh and is built on a saddle overlooking two hills - the Ganga and the Siang.
Therefore, the answer is: The Answer is D.