That isn't a very efficient cutting diet IMO, bit technically you can cut on any diet as long as you end up in a caloric defecit somehow.
The best diet for muscle sparing abilities would be a high protein diet. Carbs should be kept lower to make it easier to burn your fat stores through exercise. Your body will burn glycogen stores first (carbs) and fat stores last, so the less carbs you take in, the less glycogen you have stored=more fat burned