Preheat oven to 375°F. Cook pasta according to package directions to al dente; drain and set aside.
Heat olive oil in medium saucepan over low heat. Add garlic and cook 1-2 minutes, or until fragrant. Whisk in flour, 1/2 teaspoon salt and 1/2 teaspoon pepper, and cook over low heat, stirring until mixture is smooth and bubbly. Remove from heat and stir in milk. Return to heat, and heat to boiling, stirring constantly. Boil and stir 1 minute. Set aside.
Add diced tomatoes to cooked pasta; toss to combine. Place half macaroni in ungreased 2-quart casserole dish. Sprinkle with half remaining salt and pepper, followed by half basil and cheese. Repeat with remaining macaroni, salt, pepper, basil and cheese. Pour sauce over macaroni.
Cover dish with lid or tin foil and bake 30 minutes. Uncover and bake additional 15 minutes. Serve garnished with additional fresh basil.