Padding over where arm's held close to body (10)
I believe the answer is:
upholstery
'padding' is the definition.
'over where arm's held close to body' is the wordplay.
'over' becomes 'up' (e.g. if your time is up it is over).
'where arm's held' becomes 'holster' (as in a gun holster).
'close to' says to take the final letters (the close/ending of).
The final letter of 'body' is 'y'.
'up'+'holster'+'y'='UPHOLSTERY'
(Other definitions for upholstery that I've seen before include "Craft of covering furniture" , "Padding and covering of furniture" , "Work done on furniture" , "Chair springs and covers" .)