Which ITR applicable and where to show income

If dealer pays to you as salary then ITR1.
Otherwise ITR3

It's ITR-1 if there is no other income.

Here your friend receiving salary then ITR-1 need to file

while filling you need to segrigate salary income in following way
Gross Salary (ia + ib + ic)
i SALARY / PENSION
a Salary as per section 17(1) ia
b Value of perquisites as per section 17(2) ib
c Profit in lieu of salary as per section 17(3) ic
ii Less allowances to the extent exempt u/s 10 (drop down to be provided in e-filing utility) ii
iii Net Salary (i – ii) iii
iv Deductions u/s 16 (iva + ivb + ivc) iv
a Standard deduction u/s 16(ia) iva
b Entertainment allowance u/s 16(ii) ivb
c Professional tax u/s 16(iii) ivc
v Income chargeable under the head ‘Salaries’ (iii – iv) B1
B2 Tick applicable option  Self Occupied  Let Out  Deem