The main reason for refusal of this application is that the existing dwelling is in a row of bungalows, which are all single storey, and therefore the addition of a further floor would be out of keeping with the existing street-scene see location here.
The existing and proposed elevations below indicate that the proposal is the addition of a full storey height, which makes the bungalow into a height.
PAPA Says - Further along the same road, there are chalets which included steeper pitched roofs and still manage to house a good deal of first floor accommodation. The plan form of a bungalow is usually quite large, and so even with a chalet style house, the first floor rooms can be substantial. we would recommend a re-design of the scheme to reduce the scale, something like the images of the dwellings shown below on the same road.