Capital gains on purchase before sale

If I buy a new flat in Aug 2012 (purchase of land and agreement for construction of flat with builder - is the typical procedure) taking a loan and then sell 2 properties before Aug 2013 and use all the capital gains to close the loan on the new flat before Aug 2013 - can I get exception from capital gain tax? New flat construction will complete by Dec 2013

My auditor is saying that I cannot? :(

Can the experts please clarify?

Capital gain arising from sale of above said property will be saved up to the amount used in to

1.       purchase a residential house within year before the date of transfer of old house or within two year after the date of transfer of old house.or

2.       construct a house with in three year from date of transfer of old house property.