Cut the paneer into 1-inch pieces and shallow fry it in oil until lightly golden.
Grind the above-mentioned masala into a smooth paste, without adding any water.
Heat the butter in a pan and add the ground masala. Fry the masala in medium flame, until it thickens and the oil separates. Be patient, this takes about half an hour, but it is really worth it. The more the masala fries the better it tastes.
Now add the dhania jeera powder, garam masala, and chili powder. Fry for 2-3 more mins.
Then add salt, honey, kasoori methi, and the sour cream and stir well to combine.
Let it cook for a couple of minutes and then add the fried paneer pieces to it and let it simmer for about 5-8 mins. Add some water if needed to get the right gravy consistency.
Remove from flame and garnish with butter.
Serve the Paneer Makhanwala hot with Chapattis, parathas, or naan!!!