Old brown cat found inside seat (7)
I believe the answer is:
ottoman
'seat' is the definition.
(ottoman is a kind of seat)
'old brown cat found inside' is the wordplay.
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'brown' becomes 'tan' (tan is a kind of brown).
'cat' becomes 'tom' (a tom is a male cat).
'found inside' means one lot of letters goes inside another.
'tan' enclosing 'tom' is 'ttoman'.
'o'+'ttoman'='OTTOMAN'
(Other definitions for ottoman that I've seen before include "Turkish dynasty and cushioned stool" , "item of furniture" , "Turkish empire or ling cushioned seat" , "Turkish (hist.)" , "Turk (historical); seat" .)