Sakya, 27, had stayed with Ashish's family for eight years in their home in north-west Delhi's Swaroop Nagar, but had recently shifted to another house in the neighbourhood. He kept visiting the family, which owns a grocery shop.
The boy had been missing since January 7. Sakya had joined the search party for him and had even gone with his grandfather to the police station to file a "missing" report.
The suitcase with the child's body was found today in a cupboard inside his home. When neighbours had asked about the rising stench, Sakya had blamed it on dead rats.
The condition of the body indicated that the boy had been murdered soon after he went missing, the police said.
"My son used to call him Avadhesh uncle. He fed him chhole kulche and also promised him a new cycle. That day, he asked me to go to chachi's house and then he never returned," said the child's mother.
The family grew suspicious when Sakya stopped visiting a few days ago.
The police are still investigating how the boy was killed.
Sakya, who has attempted the civil services exams thrice, has reportedly told the police that the child was close to him but his parents didn't allow him to see him.
Last week, another boy, 5, was rescued after he was kidnapped from his school van on January 25, a day before Republic Day. The boy was saved after an encounter in which one of his three kidnappers was shot dead and another arrested. The kidnappers had allegedly asked for Rs 60 lakh ransom.