After struggling with the issue found simple solution.
Open the AssemblyInfo.cs file for your project, and change AssemblyVersion to
then the assembly version information is automatically updated each time you build the project. Then comment out or remove the AssemblyFileVersion entry from the same file, so the file version defaults the same as the assembly version. This means the file version updates automatically each time you build it so you only have to update the installer version to get files overwritten as you’re expecting.
Do same for all projects in your solution (additional dll-s)