Create a new receiving address in the behalf of another wallet? I want to create an API service that will trigger my local wallet to generate new account with receive address and return that address to a user.

User => API => my_local_wallet => API => User

The user will have this address and will be able to transfer Bitcoins into that address.
Yes, you can use bitcoin-cli for address generation.

To learn more try:


  bitcoin-cli help getnewaddress


Also consider using some RESTful service running on your Bitcoind host.

For Node I can recommend https://www.npmjs.com/package/bitcoin-core