In the case of Alexander, Collector of Internal Revenue v. Cosden Pipe Line Co., 1933, the United States Supreme Court ruled on a dispute involving tax deductions for losses incurred by an oil company due to leakage and evaporation during transportation. The Cosden Pipe Line Company claimed these losses as a deduction from gross income in their federal taxes. However, the Commissioner of Internal Revenue denied this claim arguing that such losses were not deductible under existing law because they did not constitute "losses" within the meaning of applicable revenue acts but rather were normal business expenses or costs inherent in doing business. The Supreme Court sided with the government's interpretation and held that these types of operational losses could not be deducted from gross income for tax purposes. They reasoned that while some loss was inevitable in transporting oil through pipelines, it was part and parcel to conducting such operations - thus falling into category of cost-of-goods-sold rather than being considered as separate identifiable events causing damage or destruction to property which would have been deductible under prevailing laws.

In the dissenting opinion for Alexander v. Cosden Pipe Line Co., Justice Cardozo disagreed with the majority's interpretation of tax law, arguing that it was not in line with legislative intent. He believed that Congress intended to impose a tax on oil companies based on their total income, including profits from sales of pipeline oil and gas products. However, he argued that the majority had misinterpreted this intention by allowing deductions for losses incurred during production or transportation before sale. According to him, these were operating expenses and should be deducted from gross income rather than net income as per usual business practice. This would result in higher taxable incomes for such companies which is what he believed Congress intended when they passed the relevant legislation.