In the case of Millinery Center Building Corp. v. Commissioner of Internal Revenue, 1955, the Supreme Court was tasked with determining whether a corporation could deduct from its income taxes payments made to redeem its own stock as "ordinary and necessary" business expenses under section 23(a)(1)(A) of the Internal Revenue Code. The Millinery Center Building Corporation had issued shares to finance construction costs but later redeemed them when rental income increased. The IRS disallowed these redemptions as deductions, leading to litigation that eventually reached the Supreme Court. The court ruled in favor of the Commissioner of Internal Revenue, stating that such payments were not ordinary and necessary business expenses but rather capital transactions affecting corporate structure - thus they should be treated differently for tax purposes. This decision clarified how corporations can handle stock redemption for tax deduction purposes and established a precedent on what constitutes an "ordinary and necessary" expense in this context.

In the dissenting opinion for the Millinery Center Building Corp. v. Commissioner of Internal Revenue case, it was argued that a corporation should not be taxed on income derived from property owned by its shareholders simply because it manages and controls said property. The dissenting justices believed that this interpretation contradicted established principles of taxation law, which state that income is to be taxed to those who earn or otherwise create it. They further contended that the majority's decision could lead to double taxation since both corporations and their shareholders could potentially be liable for tax on the same income stream if they were deemed as co-owners of a single asset due to shared control or management responsibilities.