In the case of Helvering, Commissioner of Internal Revenue v. Northern Coal Co., 1933, the U.S Supreme Court ruled in favor of the Commissioner of Internal Revenue. The dispute arose when Northern Coal Company claimed a deduction for depletion on coal lands it had acquired through an exchange with another company. The IRS denied this claim arguing that no cost was involved in acquiring these lands and thus there could be no basis for claiming depletion allowance which is usually calculated based on cost or value at acquisition time. The court agreed with the IRS stating that since there was no monetary consideration given by Northern Coal to acquire these properties, they cannot claim any deductions for their depletion under existing tax laws.

In the dissenting opinion for Helvering v. Northern Coal Co., Justice Stone disagreed with the majority's interpretation of tax law, arguing that it was not in line with congressional intent. He believed that Congress intended to provide a deduction for depletion only on income from mineral extraction and not on any increase in value due to market fluctuations or other factors unrelated to actual extraction activities. According to him, allowing such deductions would result in an unfair advantage for companies involved in mining operations over those engaged in other types of business activities. Furthermore, he argued that this interpretation could lead to significant revenue losses for the government as more businesses might seek similar deductions based on increased property values rather than actual operational costs or losses.