In the case of Crane-Johnson Company v. Helvering, Commissioner of Internal Revenue in 1940, the U.S Supreme Court ruled on matters related to tax deductions for depreciation and losses. The petitioner, Crane-Johnson Company had sold timberland which it had previously purchased at a higher price than its selling price. It sought to deduct from gross income both the loss incurred by this sale and also an amount for depletion or depreciation based on the original cost of property despite having extracted substantial amounts of timber during ownership period without any allowance for depletion. The court held that no deduction could be made for a loss as there was none under applicable revenue laws since land value appreciated over time offsetting initial purchase cost excess over sales proceeds; further ruling that taxpayer couldn't claim additional deductions due to failure in making reasonable allowances for exhaustion (depletion) while calculating net income throughout ownership duration.

In the dissenting opinion for Crane-Johnson Company v. Helvering, it was argued that the majority's decision to uphold a tax assessment on an undistributed surplus of a corporation was incorrect. The dissenters believed that this interpretation of the law would lead to double taxation and discourage businesses from retaining earnings for future use or expansion. They pointed out that under normal circumstances, these retained earnings would only be taxed when they were distributed as dividends. However, by taxing them while still in possession of the company, it effectively subjected them to taxation twice - once at corporate level and again at individual level upon distribution. This approach not only contradicted established principles but also threatened economic growth by discouraging companies from saving money for investment purposes.