You definitely put on some muscle. Time to cut, aim for 15% bodyfat, and this is going to be mostly done through diet, so start watching what you eat. You can't spot reduce fat, some guys hold it more on their midsection, some on their butt and legs.
Just to add to what Diamhea said...it’s 100% diet (eating good foods and less calories, keep protein up, cut down on sugar, alcohol, and white flour)...so don’t be tempted by mirracle pills or different workout programs. Keep doing exactly what your doing now. The routine your using to build muscle is the one that’s going to help you retain it while losing the fat.
Also...it’s going to be depressing as hell watching to scale drop after trying so hard to gain. Your going to feel like your getting smaller as that fat is part of the illusion of size. Your going to look “smaller” and the fat loss isn’t going to show right away...but stick with it. Once the muscle definition starts to show and the aesthetic shape becomes apparent, you’ll be happy with the result, you just have to get over that hump where you look “smaller”, but not yet defined.
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