There is no contradiction between the fact that Allah descends to the lowest heaven and His having risen above the Throne (istiwaa’)
Question

When asked "Where is Allah ?"
I reply "Above the seven Heavens and the Arsh"
But taking the Hadith regarding that Allah descends to the lowest heaven in the latter part of the night.
If someone asks where is Allah and they state it is the latter 3rd of the night now. What reply should you give. Another point is that some people say it is the latter part of the night all the time (somewhere on the earth at a paticular point in time) From this they conclude that Allah is not above His Arsh.
Praise be to Allah.Firstly, we have to know the ‘aqeedah (belief) of Ahl al-Sunnah wa’l-Jamaa’ah concerning the names and attributes of Allah. The belief of Ahl al-Sunnah wa’l-Jamaa’ah is to affirm the names and attributes which Allah has affirmed for Himself, without distorting or denying them, discussing how they are or likening them to anything else. They believe that which Allah has commanded them to believe, for Allah says (interpretation of the meaning): 
“There is nothing like Him, and He is the All Hearer, the All Seer”
[al-Shooraa 42:11] 
Allah has told us about Himself. He says (interpretation of the meaning): 
“Indeed, your Lord is Allah, Who created the heavens and the earth in Six Days, and then He rose over (Istawaa) the Throne (really in a manner that suits His Majesty). [al-A’raaf 7:54] 
“The Most Gracious (Allah) rose over (Istawaa) the (Mighty) Throne (in a manner that suits His Majesty). [Ta-Ha 20:5] 
and there are other aayahs which mention that Allah rose over His Throne. 
The rising of Allah over His Throne, which means that He Himself is High and above the Throne, is of a special nature which befits His Majesty and Might. No one knows how it is except Him. 
 
This was proven in the saheeh Sunnah, where it is narrated from the Prophet (peace and blessings of Allah be upon him) that Allah descends during the last third of the night. It was narrated from Abu Hurayrah that the Messenger (peace and blessings of Allah be upon him) said: “Our Lord descends every night to the lowest heaven when the last third of the night remains, and He says, ‘Who will call Me that I might answer him, who will ask of Me that I might give him, who will ask My forgiveness, that I might forgive him?’” (narrated by al-Bukhaari, Kitaab al-Tawheed, 6940; Muslim, Salaat al-Musaafireen, 1262)
According to Ahl al-Sunnah, the meaning of this descent is that Allah Himself comes down to the lowest heaven in a real sense, as befits His Majesty, and no one knows how that is except Him. 
But does the fact that Allah comes down mean that He vacates the Throne or not? Shaykh Ibn ‘Uthaymeen said concerning a similar question: we say that this question is based on unnecessary and excessive questioning, and that the one who asked this is not to be thanked for his question. We ask, are you more keen than the Sahaabah to understand the attributes of Allah? If he says yes, we tell him, you are lying. And if he says no, we tell him, then be content with what they were content with. They did not ask the Messenger of Allah (peace and blessings of Allah be upon him), ‘O Messenger of Allah, when He comes down, does He vacate the Throne?’ Why do you need to ask this question? Just say, He comes down. Whether or not the Throne is vacated is not your business. You are commanded to believe the reports, especially concerning the essence of Allah and His attributes, for this matter is above rational thought. 
Majmoo’ Fatawa Shaykh Muhammad al-‘Uthaymeen, 1/204-205 
Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him) said concerning this matter: 
“The correct view is that He descends and that He does not vacate the Throne. A person's soul remains attached to his body night and day until he dies, but when he is asleep it ascends… It was said, night varies, and the last third of the night comes sooner in the east than in the west, so the descent of Allah to the lowest heaven, of which His Messenger spoke, happens in the east first and then in the west...” 
See Majmoo’ Fatawa Ibn Taymiyah, 5/132 
Rising over (istiwaa’) and descending are two of the practical attributes which have to do with the will of Allah. Ahl al-Sunnah wa’l-Jamaa’ah believe in that, but in this belief they avoid likening Allah to any of His creation or discussing how He is. It cannot occur to them that Allah’s descending is like the descending of any of His creatures or that His rising over the Throne is like the rising over of any of His creatures, because they believe that there is nothing like unto Allah and He is the All-Hearer, All-Seer. They know on rational grounds that there is a great difference between the Creator and His creatures, in their essence, attributes and actions. It cannot occur to them to ask how He descends, or how He rose over His Throne. The point is that they do not ask how His attributes are; they believe that there is a ‘how’, but it is unknown, so we can never imagine how it is. 
We know for certain that what is narrated in the Book of Allah or the Sunnah of His Prophet (peace and blessings of Allah be upon him) is true and is not self-contradictory, because Allah says (interpretation of the meaning): 
“Do they not then consider the Quran carefully? Had it been from other than Allah, they would surely, have found therein many a contradiction” [al-Nisaa’ 4:82] 
because contradictions in the reports would mean that some of them were showing others to be false, and this is impossible in the case of that which Allah and His Messenger tell us. 
Whoever imagines that there are any contradictions in the Book of Allah or the Sunnah of His Messenger (peace and blessings of Allah be upon him), or between the two, it is either because of his lack of knowledge or because he has failed to understand properly or to ponder the matter correctly, so let him seek further knowledge and strive to think harder until the truth becomes clear to him. Then if the matter is still not clear to him, let him leave it to the One Who is All-Knowing and let him put a stop to his illusions and say, as those who are firmly grounded in knowledge say, “We believe in it; the whole of it (clear and unclear Verses) are from our Lord” [Aal ‘Imraan 3:7 – interpretation of the meaning]. Let him know that there is no contradiction in the Quran and Sunnah and no conflict between them. And Allah knows best. 
See Fatawa Ibn ‘Uthaymeen, 3/237-238 
Imagining that there is a conflict between Allah’s descending to the lowest heaven and His having risen over the Throne and His being high above the heavens stems from making a comparison between the Creator and the created being. For man cannot imagine the unseen things of His creation, such as the delights of Paradise, so how can he imagine the Creator, may He be glorified and exalted, the Knower of the Unseen. So we believe in what has been narrated of His rising over (the Throne), His descending and His being High and Exalted. We affirm that (and state that it is) in a manner that befits His Majesty and Might.