Do they have to take the time out?

[jeremy341a]

VB, 3 man. V team is throwing the ball in from the end line after a made basket by H. H is set up in a 2-2-1 press. I am T and in mid count almost to 4 when I whistle H for holding foul on a V player cutting to the ball. At almost the exact time I whistle for the foul but probably a moment before the V coach yells time out. I come out fist in the air and the hold sign at the spot of the foul. However both teams believe there is a time out. So both go to there benches while I'm reporting the foul. After about 20 seconds we get them to break huddle explaining there was no timeout and it was a foul. We did not charge V with a time out as we never granted one and it was only requested. Is this correct?