In a non-stick kadai (Wok), heat oil and sauté onion and cashew nuts lightly. Add tomatoes and cook for 10 to 12 minutes until tomatoes are soft and pulpy.
Add red chilli powder, turmeric powder, coriander powder, salt and sauté for 1 minute.
Let this mixture cool then transfer to a mixer, add a little water, and grind to make a smooth paste. Transfer this paste back to the kadai.
Now, add butter, cover the kadai with a lid and cook for 10 minutes on low heat.
Add ½ cup cream and mix then immediately add paneer cubes, kasoori methi powder, green cardamom powder, garam masala powder, and mix well.
The wonderful shahi paneer is ready to serve. Garnish with cream and serve hot.