Yes jit. That's very, very true. When I told a friend mine I was on a diet, she said good, because she knew I needed to lose some weight. She asked how much I weighed at the start, and I told her. She honestly did not believe me - because I have a huge, huge amount of muscle underneath all the fat and it is adding to my weight.
When I was in high school, I used to not worry about weight. I was a dancer and an athlete. I was about a size 4 or 6, and even so I weighed about 140 because I was pure muscle.
Don't be discouraged by the numbers on the scale - keep reminding yourself of other accomplishments, like exercising regularly, being healthy, losing inches, and not cheating!