If you are gaining weight but losing fat is that ok?

Yes. If you are working out and gaining muscle tone, then it is reasonable that you may gain a little weight (a few pounds) or not lose as much weight as you normally would have if you were just losing "fat" weight. It is good that you are losing fat! In addition, you may be putting on some water weight as your body adjusts. This will go away completely within a few weeks or so. If this is not the case, and you are losing "fat" but still gaining weight, you may want to see a nutritionist or doctor to find out why that would be happening. Absent of that, there is nothing wrong with gaining a few pounds of muscle as you lose fat.