Excess application of funds over and above income of trust can arise only when funds are applied from the corpus of the trust, accumulated funds, loans or goods and services received from the creditors. When funds are applied from borrowed funds or by way of sundry creditors the same can be treated as application of funds in the year in which such loan/sundry creditors are repaid from the income of the trust. However, when amount is applied from the corpus fund or accumulated fund the same cannot be treated as application of funds under section 11, because such funds have already been exempt from the income of trust in the year in which they are received or such amount is set aside. Thus, trust cannot carry forward excess application of funds.