'it' or 'its'?

"You make an excellent case for it being correct".

If you used the possessive "its", you'd have to state what it is that is being possessed.

"You make an excellent case for its proposal being correct". "It" could refer to some institution for instance.

Good question.
Some people still hold that "being" (as a gerund) requires the possessive case.
I would say "her being correct" or "his being correct" so the parallel is "its being correct."

But many would would say "it" and that's considered correct as well.

Thank you both.

I would say it being correct. Though not wrong, the genitive form sounds a bit stilted to me.

Thank you, too, Aspara Gus.