The incident occurred Thursday night in Manavta Vihar colony of Modi Nagar, 40 km from Delhi.
According to police, the contract killer, who was identified as Babloo Tyagi, fired about seven shots from an automatic pistol at Dhanesh Tyagi and his brother Paresh, also a local businessmen, at their home.
Both were injured but Dhanesh managed to take out a pistol and fire back at his assailant, killing him on the spot. Three accomplices of the contract killer, however, succeeded in fleeing in a car.
Babloo Tyagi had killed Dhanesh's uncle in 2005 and was in jail for the crime. He was presently out on bail.
"Babloo had sustained three gunshot injuries. Dhanesh and Paresh have been admitted in a local hospital in Ghaziabad. Three big bullet holes were found on the wall of their house" said Superintendent of Police (Rural) Jagdish Sharma.
"Both brothers also sustained gunshot injuries. A criminal case for attempt to murder has been registered against Babloo's three accomplices," police said.