Slice onions, peel garlic & chop ginger & tomatoes.
Making the gravy paste
Heat 1 teaspoon oil + 1 tablespoon butter in a heavy bottom pan on a low flame.
Saute the whole spices for a minute.
Add onion, ginger & garlic. Saute until onions are lightly golden.
Add cashews, tomatoes & salt. Mix it well.
Cover & cook until tomatoes is soft & pulpy. Switch off the flame. Let it cool down completely.
Discard the bay leaf.
Transfer the contents to a mixer/grinder jar. Grind to a fine paste.
To make restaurant style paneer butter masala - Strain the gravy to make a smooth gravy. Keep it aside.
Cooking the butter paneer gravy
Heat 2 teaspoons of oil + 1 teaspoon butter in a heavy bottom pan over low heat.
Add 1 teaspoon Kashmiri red chili powder. Saute for a minute. This will enhance the color of the gravy. Switch off the flame.
Add the prepared onion-tomato paste & mix. Now keep the flame on medium. Cook it for 3-4 minutes. Be careful the gravy will splutter. Stir continuously.
Cover & cook for 2-3 minutes. Stir it in between as required.
Add 1 cup water, garam masala powder, Kasuri methi, slit green chili & coriander leaves. Mix it well.
Let the gravy come to a boil.
Add paneer, fresh cream & mix.
Cover & cook for 2 minutes only. Switch off the flame.
Add 1 teaspoon butter & mix. Do not cook after adding butter. Butter gives a shine to the gravy & adds a buttery flavor to it.
Garnish it with fresh cream.
Serve paneer butter masala hot with Roti/Naan & enjoy!
Video
Notes
Grind the onion, tomato & cashews to a fine paste to make a smooth gravy.
You can strain the mixture to make it restaurant-style butter paneer gravy.
Do not increase the amount of cashews. It will make the gravy too thick.
The gravy thickens after some time. If the gravy is too thick then add hot water & adjust the consistency of the gravy. If necessary taste & adjust the seasoning.
If the gravy is thin then simmer the flame & cook it until it thickens.
You can substitute cashews with almonds. Soak almonds in hot water & peel off the skin before using it.