Is refunding any bonus back to the company still an application of income?

Dear CA Club India, My employer paid me a sign-on bonus when I joined the company with an agreement to repay the amount in full in case I leave the company within an year. I was honoured that amount withholding tax at 30%. Now, when I wanted to leave the company within an year, the company took repayment of the bonus in my FnF settlement but did not reflect it in the 'Income chargeable under head salaries' of my Form 16. Upon querying, the finance dept. of the company, they put some legal terms saying that repayment of the sign-on bonus is due to failing to keep up to the contractual agreement and that the company has a right to collect it but not necessary to reflect it in the Form 16 as it is the employee's lookout to care for the taxes. Is this correct on the employer's part to omit the repayment from my Form16 because I lost some income in the head salaries due to the agreement made with the employer? If yes, can I deduct the income chargeable under head salaries by that bonus amount and claim back my tax while filing my ITR? If yes, under which section can I do that? Please help me on this.