What is the output in the terminal when you execute the <zip -r application.ipa Payload> command? You should see something like:
panosTest:Desktop panos$ mv TestAppStoreSubmission Payload
panosTest:Desktop panos$ zip -r application.ipa Payload
adding: Payload/ (stored 0%)
adding: Payload/.DS_Store (deflated 95%)
adding: Payload/TestAppStoreSubmission.app/ (stored 0%)
adding: Payload/TestAppStoreSubmission.app/_CodeSignature/ (stored 0%)
adding: Payload/TestAppStoreSubmission.app/_CodeSignature/CodeResources (deflated 74%)
adding: Payload/TestAppStoreSubmission.app/AppIcon57x57.png (stored 0%)
adding: Payload/TestAppStoreSubmission.app/
AppIcon57x57@2x.png (stored 0%)
adding: Payload/TestAppStoreSubmission.app/
AppIcon60x60@2x.png (deflated 0%)
adding: Payload/TestAppStoreSubmission.app/
AppIcon60x60@3x.png (deflated 0%)
adding: Payload/TestAppStoreSubmission.app/AppIcon72x72@2x~ipad.png (deflated 0%)
adding: Payload/TestAppStoreSubmission.app/AppIcon72x72~ipad.png (stored 0%)
adding: Payload/TestAppStoreSubmission.app/AppIcon76x76@2x~ipad.png (deflated 0%)
adding: Payload/TestAppStoreSubmission.app/AppIcon76x76~ipad.png (stored 0%)
adding: Payload/TestAppStoreSubmission.app/AppIcon83.5x83.5@2x~ipad.png (deflated 0%)
adding: Payload/TestAppStoreSubmission.app/Assets.car (deflated 1%)
adding: Payload/TestAppStoreSubmission.app/
Default-568h@2x.png (deflated 86%)
adding: Payload/TestAppStoreSubmission.app/embedded.mobileprovision (deflated 32%)
adding: Payload/TestAppStoreSubmission.app/Info.plist (deflated 77%)
adding: Payload/TestAppStoreSubmission.app/PkgInfo (stored 0%)
adding: Payload/TestAppStoreSubmission.app/TestAppStoreSubmission (deflated 51%)
panosTest:Desktop panos$
Moreover, what version of Application Loader are you using? I used 3.6
Best,
Panos
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