And Allah's is the East and the West, therefore, whither you turn, thither is Allah's purpose; surely Allah is Ample giving, Knowing
M Shakir's Quran Translation
To Allah belong the east and the West: Whithersoever ye turn, there is the presence of Allah. For Allah is all-Pervading, all-Knowing.
Yusuf Ali's Quran Translation
The versus from is referring to the change of 'Qiblah' (direction of worship). Previously Muslims used to face the Bait ul Muqaddas as their 'Qiblah', but now Muslims are being prepared for a change in their 'Qiblah'. At the same time Muslims are being told that 'Qiblah' is nothing more than a direction. You are not worshipping the 'Qibla' but you are worshipping your lord who needs no direction. It is for your unity that these directions are prescribed. There is a Hadith in Jami' Tirmidhi which informs us of the context of this Ayat.
Sayyidna Abdullah ibn Aamir ibn Rabi'ah reported from his father that he said, "We were travelling with the Prophet (SAW) on a dark night and did not know the direction of the qiblah. So everyone prayed in the direction opposite him. In the morning, we mentioned that to the Prophet (SAW) and the verse was revealed (so where so ever you turn, there is Allah's countenance). (Jami' Tirmidhi Hadith 345, Sunan Ibn e Majah 1020)
In conclusion, one must have the belief that Allah Most High is pure from space and time. It is wrong to say that He is everywhere and it is also wrong to believe that He is on something, as all these are limited whereas Allah Almighty is limitless. However, we must believe that His knowledge encompasses everything, and he knows, sees and listens to everything.