The Pinellas Ice & Cold Storage Co. v. Commissioner of Internal Revenue case in 1932 revolved around the issue of tax deductions for a corporation's losses due to stock depreciation. The Supreme Court ruled that corporations could not deduct from their taxable income any loss sustained during the year resulting from a decrease in value of shares they owned in another company, unless such stocks were sold or otherwise disposed off within that year. This decision was based on Section 23(e) and (f) of the Revenue Act which only allowed deduction for losses realized by sale or other disposition, and did not include unrealized depreciation as deductible loss. Therefore, Pinellas Ice & Cold Storage Company’s claim for deduction was denied.

In the dissenting opinion for Pinellas Ice & Cold Storage Co. v. Commissioner of Internal Revenue, it was argued that the majority's interpretation of the tax law in question was incorrect. The dissenting justices believed that Congress intended to allow businesses to deduct reasonable allowances for wear and tear on property used in their trade or business from their gross income before calculating taxes owed. They disagreed with the majority's view that only actual, physical deterioration could be considered as depreciation when determining these deductions, arguing instead that functional obsolescence should also be taken into account. In other words, if a piece of equipment becomes less useful over time due to advancements in technology or changes in market conditions - even if it remains physically intact - its loss in value should still be deductible under tax laws according to this perspective.