We report inelastic light scattering studies on Ca(Fe0.97Co0.03)2As2 in a wide spectral range of 120-5200 cm( - 1) from 5 to 300 K, covering the tetragonal to orthorhombic structural transition as well as magnetic transition at Tsm ~ 160 K. The mode frequencies of two first-order Raman modes B1g and Eg, both involving the displacement of Fe atoms, show a sharp increase below Tsm. Concomitantly, the linewidths of all the first-order Raman modes show anomalous broadening below Tsm, attributed to strong spin-phonon coupling. The high frequency modes observed between 400 and 1200 cm( - 1) are attributed to electronic Raman scattering involving the crystal field levels of d-orbitals of Fe(2+). The splitting between xz and yz d-orbital levels is shown to be ~25 meV, which increases as temperature decreases below Tsm. A broad Raman band observed at ~3200 cm( - 1) is assigned to two-magnon excitation of the itinerant Fe 3d antiferromagnet.