In the case of Commercial Credit Company v. United States (1927), the Supreme Court ruled in favor of the U.S government, upholding a tax assessment against Commercial Credit Company. The company had purchased conditional sales contracts from automobile dealers and claimed that these purchases were not taxable under federal law as they were loans rather than sales. However, the court disagreed with this interpretation. It held that when an automobile dealer sells a car on credit and then sells that contract to a finance company like Commercial Credit, two separate transactions occur: first is sale of car to customer; second is sale of contract to finance company - both are subject to taxation accordingly. This decision clarified how such transactions should be treated for tax purposes and affirmed the government's right to levy taxes on them.

In the dissenting opinion for Commercial Credit Company v. United States, the justice argued that the majority's interpretation of Section 234(a)(4) of the Revenue Act was incorrect. The dissenting view held that this section should not be interpreted to mean that a corporation could deduct from its gross income any interest paid within a taxable year on indebtedness incurred in purchasing tax-exempt securities. Instead, it was suggested that Congress intended to prevent corporations from using such deductions as a means of escaping taxation entirely by investing heavily in tax-free securities while also borrowing money and deducting their interest payments on these loans from their taxable income. This interpretation would ensure corporations couldn't exploit loopholes to avoid paying taxes altogether, which is contrary to what they believed was Congress' intent when drafting this legislation.