Is Depreciation a source of Fund

There is big debate whether depreciation is source of fund or not.

1# Some say, ''Yes' it is true because there is no outflow of Fund.
But it is acceptable as deduction from profit for calculation of
taxable profit and dividend. That saved fund can be used for
development of company.''

2# Some say, '' It is not source of fund because there is no
profit, there will be no saving of tax via depreciation.