Line a plate with paper towels. Heat 1 tablespoon butter in a large skillet over medium heat. When the butter stops foaming, add the paneer cubes and brown well on 2 sides, about 4 minutes total. Remove to the lined plate and reserve. Wipe out the skillet with a paper towel.
Have a lid nearby for the skillet. Add another 2 tablespoons butter to the skillet over medium-high heat, then add the onion and 1/2 teaspoon salt. Cook, stirring frequently, until the onion is browned and translucent, about 5 minutes. Add the garlic, ginger, curry powder and garam masala and stir together, 1 minute. Add the grated tomato and stir for another minute. Add the chopped spinach, heavy cream, 1/4 cup water, 1 1/2 teaspoons salt and a few grinds of pepper. Cover and cook over medium-low, 8 minutes. Add the remaining tablespoon butter and carefully fold in the paneer cubes. Simmer for an additional 2 minutes to warm the paneer through.
Serve with steamed basmati rice or Indian flatbread.
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