Since the other kid had a bloody nose that is evidence that your son, a year older and looking at the size of him now, probably much bigger, punched him in the nose. He should have chosen another method to control the situation, worst case simply holding the kid's hands.
My son, on the other hand, was attacked by three other kids in the neighborhood. He did exactly what I told him to do in that situation, grab the biggest of them, who in this case happened to be the same size as my son, get him between himself and the others, and beat the crap out of him.
Your son, since he exercised excessive force on a smaller kid, was the bully. My son. since he fought back against three others, defeated the bully.