Good snooping there pal!
We suspected he was sent to another unit, but now this would confirm it and explain how he wound up under 7th Army jursidiction.
Now we just need to find out which unit he was transferred to, for the duration.
As stated earlier, it can't be the engineer unit on his discharge papers, for they only served in Italy until the end of the war and beyond.
More snooping is in order.
Once again, grand work!
Thanks to all of you and your assistance 
I am copying a few posts from folks.
This one is from the 106th Discussion board added today:
Hello Karri;
Your Grandfather, I think, went through the same fate, or circumstaces that I did.
In August 1945, the 106th was homeward bound. The Division (including me) was in a staging area in France being processed for return to the State. I think that we were in a place called Camp Lucky Strike.
We were attending an orientation class about "ruturning to the States" when a messenger handed a note to the speaker. The speaker in turn, read the note to the men, that stated, "the followig men will report to __________. It didn't say what for, however my name was included in that list of men. There were quite a few names on the list.
As it turned out, all those men were being reassinged to other Army Units in Europe. In other words the men on that list weren't not going home.
Army regulations were that they could keep a soldier for the duration of the war, plus six months.
The duration of the War wasn't declared until many months after the war actually ended on the 8th of May 1954.
Your Grandfather and I arrived back in the States on the same date in 1946 and both off us were discharged on the same date, 9 April 1946.
I wonder if we were on the same ship, which was the Westerly Victory that sailed out of Antwerp, Belgium in March 1945.
The "point" system was great, that is, unless the Army dicided to keep a Soldier for a while longer. Sometimes that system seemed very unjust for some soldiers.
And
It was not uncommon for soldiers to be reassigned to a different unit in the late stages of the war. Like mentioned, this had to do with the 'points' system devised by the Army. A soldier needed 85 to be discharged, otherwise further service was required. Since the 106th was deactivated in October 1945, your grandfather was probably transferred before that time and continued with the occupation army in Europe.
The 16th Engineer Battalion, from what I read, was stationed in Austria (US Zone of Occupation) from August 1945 onwards.
The date of that unit's arrival in the USA (April 1945) seems to correspond with your grandfathers discharge papers.
The 106th was actually part of the 7th Army for some time in 1945.