the provision you asked applies to the profit and gains from business and profession. while ascertaining income from any business/ profession.
Section 40A (3) of the Income tax act is an Anti- Tax evasion provison. the idea si to curb the cases of tax evasion by disallowing cash payments of the expenditure morethan 20,000/-.
Any expenditure incurred out of the business/ professions income the payment of which is made otherwise than cheque/ DD drawn on a bank and amount over Rs. 20,000/- will be disallowed. this means that expenditure will not be elgible for deduction as expenditure hence the tax will be paid on that expenditure.
If you are buying consumer goods for personal use as an individual then this section 40A is not attracted as the expenditure is not claimed as an expenditure. this is for business and profession. If you buy consumer goods for your business then section 40A is applicable i.e payment must be made either by Account payee cheque or DD.
But i do not undersand, when you are making big payment then why are you making in cash. It is always advisable to make payments through Cheque IF your transaction/ intention is genuine. I never suggest to make cash transaction or if required make it as less as possible becaue it is always exposed to the risk of being Fake currency.
the provision of Income tax are very harsh and the consequences of concelment of income can tease you even upto 4 years from the relevant years and once the relevant year passes then you can not make it good will have to undergo the penality/ prosecution etc.
hope thiw will help.