Do ya mean that if we read (22.65°C)+(+/- 0.4°C) this could be calibrated to very precise level for SHT11 say with proper calibration accuracy can be achieved to be about +/-0.1°C?

Yes! You need a look-up-table. In it stands, that if you measure 22.65°C + 0.4°C = 23.05°C, real temperature is 22.65°C. So, whenever result of measurement is 23.05°C, then from look-up-table the correct temperature 22.65°C is taken. Only remaining error then is 'repeatibility error' of +-0.1°C.

////// I intend to measure at only one location that is the return air\

Even then you will not have a temperature showing smaller fluctuations than 1K...2K!

>Such accuracy for a HVAc system is ridiculous
///// Ya , but boss is always right \

Tell your boss, that even the most comfortable and expensiviest cars do not have a regulation down to 0.1°C, because this makes physically no sense. Also, skin of human being will not be able to distinguish such small temperature differencies.

Kai