"It is his, not mine."
Actually I am changing my answer - as I don't think I fully understood what you were asking before.
If this sentence is used in context as it would be under normal circumstances... (ie. it is said while pointing at an object or otherwise indicating the object in some way), you will know what the person is talking about.
In this case (E' il suo, non il mio) the person speaking must be talking about an object that has masculine gender because if they were talking about an object that has feminine gender the sentence would be: "E' la sua, non la mia"
If the gender of the object is unknown to the speaker you would by default use the masculine gender - for example if the object is a cat and you don't know whether it is a male or female cat, you refer to it as masculine. (E' il suo gatto, non il mio). If you know it is a female cat you would say "E' la sua gatta, non la mia" instead.
Because the article (il) always has the same gender as the possessive word (suo). You can have "il suo" and "la sua" but not "il sua". Also as you are referring to the same object in both the first part of the sentence (e' il suo) and the second part of the sentence (non il mio), the gender of the possessives and the articles should all match.
E' la sua, non la mia - should also be accepted as a correct answer. E' la sua, non il mio - shouldn't be accepted as the object being possessed has changed gender part way through your sentence.