We report inelastic light scattering studies on Ca(Fe0.97Co0.03)2As2 in a wide spectral range of 120-5200 cm-1 from 5K to 300K, covering the tetragonal to orthorhombic structural transition as well as magnetic transition at Tsm ~ 160K. The mode frequencies of two first-order Raman modes B1g and Eg, both involving displacement of Fe atoms, show 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 400-1200 cm-1 are attributed to the electronic Raman scattering involving the crystal field levels of d-orbitals of Fe2+. 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.
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