Right. Please can we get this straight.
You object to the Application, which was broadly supported by the Planners (the people with the through knowledge of the planning system) but rejected by the Planning Commitee, who used emotive language of various types. The Applicant appealed and the rejection has been overturned on appeal. So you are unhappy?
This sounds like the Inspector is taking the view that the application is broadly in line with wider Government policies. As fredpuli points out, it is Government policy to increase housing densities WITHIN THE EXISTING SETTLEMENT BOUNDARIES as a means of constraining urban sprawl. This means that perfectly good houses in big plots of land are being pulled down and higher density developments are being put in their place. If you tell us which Council this is, I'll take a look at the Local Development Plan and will be 90% sure of finding a relevant policy that the professional Planners, and the Inspector, are concluding this development aligns to.
Sorry but this is happening all over. No-one has done anything wrong, its nothing to do with fraud. The Councillors who voted against it are either ill-informed or (more likely) making a political stunt to say they supported local opinions. Decisions broadly are determined on the fit to policies.