I figured out the solution, we can set colormap and then imshow to display respective images..
   % --- Executes on button press in pushbutton1.
    function pushbutton1_Callback(hObject, eventdata, handles)
    % hObject    handle to pushbutton1 (see GCBO)
    % eventdata  reserved - to be defined in a future version of MATLAB
    % handles    structure with handles and user data (see GUIDATA)
    [img,cmap] = imread('peppers.png');
    cla(handles.axes1,'reset');
    colormap(handles.axes1,cmap);
    axes(handles.axes1);
    imshow(img,[]);
    % --- Executes on button press in pushbutton2.
    function pushbutton2_Callback(hObject, eventdata, handles)
    % hObject    handle to pushbutton2 (see GCBO)
    % eventdata  reserved - to be defined in a future version of MATLAB
    % handles    structure with handles and user data (see GUIDATA)
    % global imB
    temp = imread('cameraman.tif');
    cla(handles.axes1,'reset');
    colormap(handles.axes1,gray);
    axes(handles.axes1);
    imshow(temp,[])

